The Nexus of Economic Growth, Education, Fertility Rate and Female Labour Supply: Empirical Evidence in Malaysia
Keywords:Economic growth, education, female labour supply, fertility rate, Malaysia
Malaysia, a fast growing developing country in Asia, has envisaged Shared Prosperity Vision 2030 to join the ranks of high-income and developed economies through inclusive and sustainable growth by the year 2030. To accomplish this vision, the female participation in the labour market is much needed as the female constitute almost half of Malaysian population and their population is rising above that of male in the recent years. However, the female labour force participation rate is way lower than Malaysia’s overall labour force participation rate. The relatively low female labour force participation rate can be a dominant encumbrance to Malaysia’s economic development and thus the materialisation of its Vision 2030. This paper, therefore, attempts to investigate empirically the long run relationship among female labour supply, education, fertility rate, and economic growth and further identifies the causal relationship among these variables in Malaysia. The bounds test and Toda-Yamamoto granger non-causality methodology are employed to examine the interrelationships among the variables. The result of our study indicates a strong evidence of long-run relationship among the variables. Besides, we have found a significant inverted-U-shaped association between women’s employment and economic growth in Malaysia. The results of Granger causality tests further confirm that there is a strong evidence of unidirectional causality from fertility and economic growth to female labour supply as well as from economic growth to fertility.