All Research

Siew-Pong Cheah · Lin-Sea Lau · Chee-Keong Choong ·International Journal of Economics and Management ·2021 ·JEL: D3, D63, G51

Most past studies have assumed a symmetric relationship between income distribution and household indebtedness. Therefore, linear or symmetric modelling would miss possible asymmetric relationships between income distribution and household debt, resulting in misleading conclusions and policy suggestions. Thus, this study has explored the potential asymmetries between household debt and income inequality within long-run and short-run relationships. This study discovered that the association between income inequality and household debt was asymmetric in the long and short run using the nonlinear autoregressive distributed lag model. The results showed that only decreases in income inequality had a significant and positive effect on household debt, while increases in income inequality did not have a significant effect. The findings emphasised the need for policies to reduce income inequality to lessen debt among Malaysian households.

Jia-Jun Gabriel Yau · Siow-Hooi Tan ·International Journal of Economics and Management ·2022 ·JEL: O33, O40

This study re-investigates the presence of the Kuznets curve in the context of Malaysia, by employing an autoregressive distributed lag (ARDL) approach. We seek to examine the non-linear impacts of economic growth on income inequality by investigating the existence of a second turning point to the relationship. Furthermore, we also assess the impacts of information and communication technology (ICT) (through internet, mobile, and broadband usage) on income inequality, besides the determinants of income inequality which have been extensively studied within the framework. This endeavour leveraged a time series analysis whereby the data was employed from the time period of 1970–2018. Our estimation results support the S-curve hypothesis that relates economic growth to inequality starting from the back portion of the inverted U-shaped curve. Our results confirm that ICT can actually be part of an active economic policy aiming to reduce existing income inequalities.

Rusli Latimaha · Zakaria Bahari · Nor Asmat Ismail ·Jurnal Ekonomi Malaysia ·2019

In this paper, the authors use dynamic panel data in order to assess the linkages between the cost of living, income inequality, gross domestic product (GDP) per capita, population and unemployment rate with respect to the street crime rate in Malaysia. More specifcally, the investigation considers whether the following could be capable of generating any difference in the crime rate observed across many types of street crime. The F-test, Breusch-Pagan Lagrange Multiplier test and Hausman tests affrm the most preferred model to explain criminal behaviour is by using Fixed Effects Model almost for all types of street crime. The fndings of the estimated coeffcients reveal that the cost of living is negatively related to all street crime types and not signifcant as well as unemployment rate. There is a motivation towards street crime not to earn a living or jobless, but other motivating push factors that relate to the personalities of the offenders such as drug addiction. Moreover, income inequality is only signifcant in terms of total street crime and unarmed robbery gang estimation models as well as GDP per capita and population in snatch and theft estimation models. Interestingly, we extend the by changing the defnition of crime into percentage and the results show that the cost of living is signifcant with the correct sign and has a positive relationship with all types of street crime rates except for snatch and theft estimation models. The GDP per capita is also a main infuencer on all types of street crime rates and has a negative relationship. Finally, the unemployment rate is only signifcant in the unarmed robbery estimation models and has a positive relationships as well as income inequality variable in total street crime and unarmed robbery gang estimation models. This street crime has been shown to be sensitive to the change in unemployment rate and income inequality and also have positive linkages.

Saeed Solaymani ·Journal of Economic Studies ·2020 ·JEL: H2, H24, H25, O15

This study is the first attempt to analyze the effectiveness of recent two major tax policies, the reductions in personal and corporate income taxes and a rise in indirect tax and their combine, under both balanced and unbalanced budget conditions, on the economy and social aspects of Malaysia. This study uses a computable general equilibrium model to investigate the impacts of all simulation scenarios on the key macro and micro indicators. Further, based on the 2012 Malaysia Household Income and Expenditure Survey, it uses a micro-data with a significant number of households (over 56,000 individuals) to analyze the impacts of tax policies on poverty and income inequality of Malaysian. Simulation results show that, under the balanced budget condition, personal and corporate income tax reductions increase economic growth, household consumption, and investment, while the rise in indirect tax has adverse impacts on these variables. However, in the unbalanced budget condition, all tax policies, except indirect tax policy, reduce real GDP and investment in the economy and the indirect tax policy has insignificant impacts on all indicators. All policy reforms reallocate resources, especially labor, in the economy. In both budget conditions, the reductions in corporate and personal income taxes, particularly the corporate income tax, decrease poverty level of Malaysian households. Results also indicate that both tax policies are unable to influence income inequality in Malaysia.

Muhammed Abdul Khalid · Li Yang ·Journal of Asian Economics ·2021

In this paper, by combining information obtained from national accounts, household surveys, and fiscal data, we document the evolution of income inequality in Malaysia, not only at the national level (for the period of 1984–2014) but also by ethnic group (for the period of 2002–2014). To our knowledge this is the first attempt to produce inequality measurements of Malaysia, which are fully consistent with the national accounts. Our research shows that despite Malaysia’s exceptional economic growth rate, its growth has been inclusive. For the period of 2002–2014, the real income growth for the bottom 50 % is the highest (5.2 %), followed by the middle 40 % (4.1 %), the top 10 % (2.7 %) and then the top 1 % (1.6 %). However, while average growth rates are positive across all ethnic groups (Bumiputera 4.9 %, Indians 4.8 %, and Chinese 2.7 %), the highest growth of real income per adult accrued to the Bumiputera in the top 1 % (at 8.3 %), which sharply contrasts the much lower growth rate of the Indians (at 3.4 %) and negative income growth rates of the Chinese (at −0.6 %). Despite the negative growth rate, the Chinese still account for the lion’s share in the top 1 %. In 2014, 60 % of the adults in the top 1 % income group are Chinese, while 33 % Bumiputera, and 6 % Indians. We conclude that in this period, Malaysia’s growth features an inclusive redistribution between income classes, but with a twist between racial groups.

Abdul Rahim Ridzuan · Shahsuzan Zakaria · Bayu Arie Fianto · Nora Yusma Mohamed Yusoff · Nor Fatimah Che Sulaiman · Mohamad Idham Md Razak · Siswantini · Arsiyanti Lestari ·International Journal of Energy Economics and Policy ·2021 ·JEL: G10, F62

This study offers new insights for policymakers to reduce income inequality, thus ensuring economic growth which greatly benefits the poor segment of population and directing financial sector to provide easy access to financial resources for lower income group at cheaper cost. Bound test was applied to examine the long-run and short-run relationships based on the sample period beginning from 1970 until 2016. The results confirmed the existence of a long-run relationship between the variables. Financial development in Malaysia, Indonesia and Thailand had successfully reduced income inequality, however, a different effect was recorded in the Philippines where income distribution was worsened. Furthermore, economic growth brought positive effect to income distribution in Malaysia and Indonesia, but not for Thailand and the Philippines. Inflation, trade openness and foreign direct investment, provided mixed results for all countries. Among the policies recommendation for this paper are there should be more easy accessibility for entrepreneurs to reach the wide range of financial services including conventional and Islamic financial products, the expansion of capital market, as well as giving proper attention to the financial sector. Besides, granting the access to capital markets for low income groups or underprivileged individuals might be helpful to them either by developing entrepreneurial skill or involvement in productive activities and receive better salaries. This policy will give insight to the policymakers to strengthen their financial institutions, especially during the pandemic of Covid-19