Historical Review By Expertise And Theory Economics

Table of Content

Alumnus is a individual who has finish the third instruction degree in university or either college that waiting for doctor’s degree, maestro surveies. However, a portion from that would take to get down looking for occupations. Unemployment defines by the International Labor Organization, which occurs when people are without occupations and they have actively look for occupations within the past four hebdomads.

Labor force defines as people who are willing to work at the market equilibrium wage who may hold been unemployed or looking for occupation. In order to mensurate unemployment in a state the importance of labour force, we use the unemployment rate.

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Unemployment rate explained as the portion of people who are non working, idle which stand from the position of economic system, theoretically province that unemployment occurs when ‘supply of labour exceed the demand ‘ . Malaysia had faced the economic downswing every bit much as 5 times which decidedly cause a fluctuation in concern rhythm. A general position, the downswing causes the market to contract and finally make an impact on these adolescents for what we called ‘fresh alumnus ‘ . The paper will concentrate on the causes of unemployment among the alumnus within the period of 2004-2010. Graduate term refer to the people keeping an instruction making of sheepskin and above.

Unemployment rate, a step of the prevalence of unemployment in the manner of ratio, and calculated as a per centum by spliting the figure of unemployed persons by all persons presently in the labour force ( actively involved in work )

Unemployment is view as a serious issue in the economic development world-wide after war universe two. In economics term, high unemployment allocate that the work force are non used expeditiously. Therefore, full employment should be a major macroeconomic aim of any authorities because it maximizes end product.

‘Business rhythms are a type of fluctuation found in the aggregative economic activity of states that organize their work chiefly in concern endeavors: a rhythm consists of enlargement happening at about the same clip in many economic activities, followed by likewise general recessions, contractions and resurgences which merge into the enlargement stage of the following rhythm ; this sequence of charges is perennial but non periodic ; in continuance, concern rhythms vary from more than one twelvemonth up to ten to twenty old ages. ‘ ( Nazaria Baharudin, 1997 )

1.2 Management Dilemma

Here need citationAccording to MP William Leong, in twelvemonth 2004 there were 4,594 unemployed alumnuss, in twelvemonth 2005, there were 2,413 unemployed. In twelvemonth 2006, there were 56,750 unemployed. In twelvemonth 2007, there were 56,322 unemployed. In twelvemonth 2008 ( as if June ) there were 47,910.

From the words of Najib, there were 60,000 unemployed alumnuss in the twelvemonth March 2009. This was more or less in line with 57,701 alumnus registrants on the exchange in March 2009. In 2010, it was reported that 30,000 alumnuss could non happen the employment after 6 months alumnuss.

From the findings, there is an increasing rate of adolescents go forthing school seeking for occupation. The occupation searcher was in high scope which leads to the public concern, as due to unemployment had a cause serious job in a state from the position of economic, health and safety of state. In the interim of unemployment is lifting, the same of illegal activity go oning in the state is at such a flashing fire acquiring serious, as pin point to more specific issue like robbery, killing and suicide instance which all had cause a serious job in the safety of a part event in a state. Those facts had extra into jobs, and such a serious issue make sense for us to go on and detect more deeply about the issue. Our research inquiry is what are the causes of alumnus unemployed in Johor Bahru?

HISTORICAL REVIEW by expertness and theory


hypertext transfer protocol: //en.wikipedia.org/wiki/Recession # cite_note-34International Monetary Fund ( IMF ) states that when the planetary growing is below 3 per centum, there will be a planetary recession. ( ^A The Recession that Almost Was.A Kenneth Rogoff, International Monetary Fund, Financial Times, April 5, 2002 )

IMF has estimated that recession seems to look over a rhythm enduring between 8 -10 old ages. As with the IMF footings, past three planetary recessions for the last 3 decennaries, the GDP end product was 0 per centum or negative. ( ^A Miller, Rich ( 2008-01-28 ) . “ Global Recession Risk Grows as U.S. `Damage ‘ Spreads ” . Bloomberg.com. Retrieved 2011-01-29 ) .

Economists at the International Monetary Fund ( IMF ) province that a planetary recession would take a lag in planetary growing to three per centum or less. By this step, four periods since 1985 qualify: 1990-1993, 1998, 2001-2002 and 2008-2009.

2.0 Research aim

Survey about the causes of alumnus unemployed is the chief aim in this research. In the research aim, the anterior measure that the group is traveling to done is to analyse the being of our quandary ; the alumnus unemployment in Malaysia is a truth and bing job in the societal. Literature reappraisal in the signifier of pdf file will be study in this sub-section, on relevant subject about the alumnus unemployed research every bit good as theory of unemployment in economic science footings. Extract information that related to unemployment and farther survey on alumnus unemployment. Develop research design schemes in the signifier of questionnaire or either in interview signifier. Analyze the issues refering to the alumnus unemployment. Find out the causes of graduate unemployment. Decide the country to develop to cut down the alumnus ‘s unemployment rate to fix the research proposal.

Below are the aims of the research that we are traveling to accomplish in order to work out the quandary.

1. To happen out whether making of instruction service as a competitory border in calling promotion.

2. To happen out whether female being unemployment is due to the deficiency of societal and communicating accomplishment.

3. To happen out hapless bid of linguistic communication is the cause of unemployment

4. To happen out whether the “ soft accomplishment ” service as a basic demands in the society.

5. To happen out whether working experience cause alumnus being unemployed.

3.0 Literature Review

1st Literature Review:

Unemployed Alumnuss

Naziria Baharudin

Harmonizing to expertise research, they found that economic growing measured by existent gross domestic merchandise ( GDP ) and unemployment rate will be analyzed, and besides research the type of signals transmitted on labour market conditions.

They were merely focal point on the impact of the economic downswings amongst the unemployed alumnuss peculiarly the first labor market entrants during the periods 1996-2003. The term of alumnuss was refers to a individual who keeping the making of Diploma, Degree and etc.

Study Stage

They are focus on some country. They were survey on unemployment among young person in India. The objects of the survey were raise awareness amongst components refering the job associated with the labor market entry of immature people. They besides try to better their understanding and plan options for undertaking the job of young person unemployment and besides heighten the capacity of member provinces to plan and implement and plan for advancing youth employment.

In the twelvemonth 1991- 1997, Malaysia experiences a few old ages of rapid economic growing with the existent gross domestic merchandise ( GDP ) growing of 8.5 per cent and unemployment below 3 per cent. Economic in Malaysia had been affected by the fiscal crisis in the twelvemonth 1997. The impact was in grounds with economic growing, the lag of existent GDP.

They besides do some research about the features of alumnus unemployed. As harmonizing to their survey in the unemployment state of affairs in Malaysia, the figure of female unemployed was more than the figure of male unemployed alumnus.

Other than existent GDP growing and unemployment, there still got labour market indexs to the policy shaper. The Educational Statisticss of Ministry of Higher Education shows that the alumnuss with Diploma and above from public establishment is continued to from 19208 people in twelvemonth 1996 to 75630 people in twelvemonth 2003. From the twelvemonth 1996 to 2003, the alumnuss with unmarried man grade represent 55.3 to 66.4 per centum of entire end product.

In work outing the fiscal crisis, National Economic Action Council ( NEAC ) has come out with some program, with the aim:

Restoring market assurance

Keeping fiscal stableness

Strengthening economic basicss

Equalize societal economic

Restore adversely affected sectors

Besides, NEAC would hold besides come out with some coders particularly for alumnus. And the enterpriser ‘s strategy is the hope for alumnus in the life by making the occupation chance by their ain.

Method of analysis

The survey of unemployment is base on the method of Employment ratio and Population at Risk ( PAR ) Method. Employment ratio is an index of labour market conditions. The alterations in labour force engagement affect the unemployment rate but do non impact the employment ratio of unemployment is non equal for step the worker who are willing to work. ( William J.Boyes in the Dynamics of Theory and Policy, 1984 )

Population At Risk ( PAR ) introduce. ( Ray Thomas,2004 ) provide with the step of stock from 2 dimension which are day of the month and size of the conventional unemployment statistics, and after add one of 3rd dimension clip which provide the accurate clip frame and statistics of entrants to explicate geographical fluctuation in employment. PAR provides the solution where the PAR rate for the twelvemonth or more unemployment refer to the proportion of those who are unemployed a twelvemonth ago that is still unemployed. ( Ray Thomas, 2004 )

The impact of fiscal in 1997 has caused an instability of demand and supplies of labour force. Alumnuss have no pick to accept the occupation available on that period. Such job will prevail unless action and specific steps taken to turn to it.

2nd Literature Review:

Okun Law




# # degree Celsius

Department of Economics, Faculty of Economics and Management,

Universiti Putra Malaysia

Harmonizing to expertise research, we found the Okun Law provinces there is a negative relationship between motions of unemployment rate and existent GDP.

They had come out 2 thoughts on making the research

a ) Whether an Okun type of relationship between end product and unemployment in Malayan economic system.

B ) In the sense of theory, labour force is the first impact on economic system, while the unemployment has give a symptom of labour resources are non being used expeditiously. In here, they stated that the major macroeconomics end of an authorities should be accomplish the full employment as it could likely maximise the end product of the state in order to increase the GDP of the state.

Study phases

They distinguish the research into major 4 stages.

The analysis is caring out through happening out he degree of GDP growing rate that needed to accomplish the full employment as signifier the information they collect will assist them to analyze the causal relationship between the end product and unemployment.

In 1st phase, the survey of unemployment tendencies in Malaya: 1970-2004. Economic transmutation, fabricating sector replacing the primary sector gives impact on employment in the economic system.

2nd phase, twelvemonth 1983-1988, worldwide recession, all beginning of sector had been affected during that period, the internal and external demand was earnestly impact by the economic downswing.

3rdstage, Economic recovery session brings displacement in labour use ; fabrication sector had replaced the agribusiness sector, cause deficit of labor.

In 4thstage, the eruption of Asiatic fiscal crisis in 1998, a rise in unemployment, rampant retrenchment and house restructuring taking topographic point.

As harmonizing to the jurisprudence, Okun ‘s ( 1962 ) original work provinces that a one per centum point decrease in unemployment rate would increase end product by about 3 per centum.

Researcher Freeman ( 2001 ) uses new developments in trend/cycle decomposition to prove

Okun ‘s Law for a panel of 10 industrial states had concluded the jurisprudence is still capable of supplying estimations of the effects of unemployment on GDP. The restriction of the Okun surveies is that labour force engagement, productiveness and production maps are non taken in as consideration for the measuring, as these factors are of import influence in employment.

The account in the Okun as the end product program of the house is due to the alteration of aggregative demand has direct affect the labour beginning demand and hence impact the unemployment rates.

There are 2 methods to mensurate the Okun coefficient by utilizing the one-year clip series informations from 1970-2004, with 1985 as the base twelvemonth for the GDP informations.

Measurement had shown a negative relationship between unemployment and end product growing That suggest one per centum diminution in unemployment will increase end product by 1.75 per centum, much less than the Okun ‘s original work.

Keywords: GDP Growth, Unemployment Rate, Okun ‘s Law, Causal


As decision, they had justify the Okun jurisprudence can be applied to explicate in Malayan status and they states the job itself will non able to work out unless they tackle the labour market and occupation searchers point of position.

3rd Literature Review:

Beginnings of the Unemployment Rate:

The Lasting Legacy of Measurement without Theory

This the a research survey about the measuring without the theory which refering the research was carried out by David Card UC Berkeley and NBER and it was done in February 2011.The study was prepare for the 2011 meeting of the American Economic Association.

In this research, it ‘s found that particularly in recessive period, has attractive force reasonably much attending from the policy shapers and general populace.

By mentioning the Work Progress Administration and Census Bureau, they define unemployment as people who are non working but are actively seeking for work. And the step of unemployment rate concluded as the fraction of people in the work force who are presently seeking for occupation. But surprisingly, the construct of labour force ( the equation of unemployment with the active occupation hunt ) is non eventually emerged at 1940. Over other specific concerns about the absence of theoretical underpinnings, the modern definition of unemployment has become a singular victory of practical measuring. From this, economic experts remain disbelieving on any individual definition “ unemployment ” .

The survey had been categorize into three parts which are, A ) Unemployment Measures Up to 1931, B ) The Development of Unemployment Measures and the 1937 Unemployment Census, C ) The Monthly Report on the Labor Force.

a. Unemployment Measures Up to 1931

At the degree of national, the earliest effort was in 1880 Census, which taking to those at the age of 10 or older that they are non being employed during the Census twelvemonth ( from June 1, 1879 to May 31, 1880 ) .They set up a questionnaire to roll up the information of “ paid business ” ( see Hauser, 1949 ; Ransom and Sutch, 1986 ) .They did research concerning on handicapped and retire, work with paying rewards, and people who are helping in production of marketable good.

In 1910 Census, They had expanded the survey which affecting the information of industry and “ category ” ( , paid worker or self employed ) .From at that place, they had set up the exact inquiry. They produce the inquiry on business, industry, and category in 1910 nose count, inquiries on ability to work, occupation hunt, and continuance of unemployment. However the reply for the study signifier have been lost and left merely the tabular matter that constructed by the Census Bureau.

The publish of happening from Census Bureau in June 1930, were acquiring a controversial about the deficiency of information on the people “ under employed ” ( those who were working portion clip but desired more work ) .

B. The Development of Unemployment Measures and the 1937 Unemployment Census

Due to the demands of a complete numbering and accurate of measuring technique on labour force, the Civil Works Administration and Works Progress Administration ( WPA ) had provided a series of information harmonizing to the study of unemployed. However the study in early was concern on paid workers and that makes a restriction, which had led to more nonsubjective ways of straight measure the information.

In 1937, Congress authorized a national “ voluntary enrollment ” of unemployed which use to carried out the re-interviewing a sample of households who has receive the earlier voluntary enrollment signifier. The reply organize the series of inquiry asked, they had concluded that, labour force is define to reason everyone who worked, every bit good as those who are able to work and actively seeking for occupations.

c. The Monthly Report on the Labor Force

Follow by Enumerative Check Census ( ECC ) , researcher of WPA has program for a national multi-stage sample, that will be conducted monthly ( Stephan, 1948 ; Hansen, 1987 ) .The Survey is name “ Monthly Report on the Labor Force ( MRLF ) ” , which study covers 64 states, with a base of 6 month revolving panel ( Frankel and Stock, 1942 ) .

The Census inquiry for the activity were closely match those of the MRLF ( see Hauser, 1949.And the first study on April 1940 was 8.8 % .An interagency panel finally concluded that the MRLF sample statistics were likely closer to the truth than the consequences from the ( much larger ) Census numbering ( Bancroft, 1957, pp. 74-75 ) .

Year 1942, experimentation with extra inquiry and analyses of responses led to census takers frequently “ leaping to decision ” about the activities of the interviewees, which leads to an undercount of both employment and unemployment ( see Bancroft and Welch, 1946 and Bancroft, 1957 ) . That leads the duty of MRLF moved to the Census Bureau.

d. Why Did the Modern Concept of Unemployment Emerge so Late?

International Conference of Labor Statistician replaced its old “ paid workers ” criterion for labour force measuring with one based on the WPA method in 1947 ( Galenson and Zellner, 1957, pp. 441-442 ) .

There is small account for the paid workers concept until late thirtiess. Labor market theoretical account was become disused by 1920s, but with the absence of clear alternate ( Goldin, 1990 ) .Along the manner, there are groups that repeatedly raise up the issue of active searching and under-employed to be their numbering. And current state of affairs, we remain the same, we continue with the construct that the individual either working, seeking, or out of the labour force.

e. Measurement Ahead of Theory?

Another possible ground for the late emerge on definition of unemployment is that the societal scientists ( particularly economic experts ) had non developed a theory of occupation hunt. In early clip, the demand and supply of the labour force, a individual who is employed or unemployed, there are no distinguishable function for the hunt. And that was non view as an of import subject of research involvement among the scientists before the World War II.

They have strengthened the decision by the scrutiny theoretical surveies of unemployment are about a simple macro theoretical accounts and package of measuring is appeared in JASA* .

Perceivably, economic experts had left the inquiry of how to specify and mensurate unemployment to the statisticians and administrative officials. Besides the theoretical beginnings, the comparing unemployment with the active hunt has been thrived by the Nobel Prize awarder, Peter Diamond, Dale Mortensen, and Chistopher Pissarides for their work on Strigler ‘s ( 1962 ) acknowledgment on the importance of pay scattering.

Causes of Graduate Unemployment

From the findings, we discover the cause of unemployment. One of the causes is an instruction ; the making of the alumnus may non be accepted by the company. Certain company merely recognized certain making. From this 21 century, more and more company preferable engaging those who keeping higher making of certification.

They besides found that the causes of graduate unemployment. Their consequence is presented in order of being cited. Misdirected preparation of graduates-most classs are non relevant to current demands for labour, Graduate holding unequal practical preparation during class of survey, Public & A ; private sectors non spread outing fast plenty to absorb the increasing figure of alumnuss, social and graduates favoritism among occupations would likely do the employer non to engage different races or sex, non-transparent enlisting processs such as people do corrupt to be recruit, deficient support for alumnuss by both authorities and private sectors to put up their ain concerns and last deficiency of reding on occupation chances.

However, economic besides is one of the causes of calibrated unemployment. Chosen the Wrong Field of Study, The Quality of Education is non up to Standard, They Lack Soft Skills, Workplace Readiness and Experience. Notwithstanding the fact that African pupils are more likely to take surveies countries with lower employment, African alumnuss are decidedly still disadvantaged in the labour market as their Expectations are excessively high.

5.0 Research Design

5.1 Type of Research

Our research done is a Pure Research. This research is applied to work out general job and to obtain new information about alumnus unemployment from what we study in literature reappraisal.

5.2 Purpose of Research

The intent of making this research, graduate unemployment is an Explanatory Research. The research what we have done is used to analyse and explicate about how and why the alumnus unemployment happen.

5.3 Time Frame

The rate of alumnus unemployment is study from 2004 – 2010.

5.4 Scope

All of the related information is come from the dependable resources which can be mentioning in the site of resources portion.

5.5 Environment

Social statistic & A ; ILO.

5.6 Data aggregation

This is a qualitative research to research the nature of job and bunch sampling and pilot proving to make more specific and accurate informations. The intent of making qualitative research is focus on quality of the research subject instead than measure of the research subject. Data beginnings are happening related research by professional, journal and website.

6.0 Research Agenda

We are making a research about graduated unemployed in Malaysia.

Date: 4 April – 11 April 2011 ( 7 yearss )

Group members were analyzing Academic Research accomplishment. Then, after finish analysis and survey, group treatment will find the research rubric and resources of the research.

Date: 12 April – 20 April 2011 ( 8 yearss )

After that, group members search some information about the research rubric and will measure literature reappraisal to understand all the statement about the research.

Date: 21 April – 27 April 2011 ( 6 yearss )

Finish evaluate, group members seek blessing from lector to do certain that our research rubric, direction quandary is right.

Date: 28 April – 3 May 2011 ( 5 yearss )

After we get blessing from Mr. Paul, group member were started to fix power point slide for presentation.

Date: 4 May 2011 ( 1 twenty-four hours )

4 May 2011 Wednesday, the twenty-four hours to presentation and show to Mr. Paul what we have done for this research.

Date: 5 May – 22 May 2011 ( 19 yearss )

Members will get down to acquire debut from all the dependable resources and set in the study. After that group members will analyze about research aim to happen out the sentiment of alumnuss upon the unemployment issues, whether making as the basic standards to be employed and the employers ‘ position in conformity to the high rate of unemployment.

After finish research aims, we will read from the dependable resources and compose into the study. After that, get down to make research design to explicate what type of proposal is, intent of proposal informations, beginnings, clip frame and environment. Next, research agenda is record the day of the month how we making this study and the day of the month. Last, roll up all the resources put in the concluding written proposal.

7.0 Resource

David Card. 2011.Origins of the Unemployment Rate: The Lasting Legacy of Measurement without Theory. [ ONLINE ] Available at: hypertext transfer protocol: //emlab.berkeley.edu/~card/papers/origins-of-unemployment.pdf. [ Accessed 12 April 11 ] .

Greg Lopez. 2011. Bumiputera alumnus unemployment and Malaysia ‘s universe category instruction system – a formula for catastrophe [ ONLINE ] Available at: hypertext transfer protocol: //asiapacific.anu.edu.au/newmandala/2011/02/06/bumiputera-graduate-unemployment-and-malaysias-world-class-education/ [ Accessed 05 April 2011 ]

Institute of Islamic Understanding Malaysia: : IKIM. 2011.Institute of Islamic Understanding Malaysia: : IKIM. [ ONLINE ] Available at: hypertext transfer protocol: //www.ikim.gov.my/v5/index.php? lg=1 & A ; opt=com_article & A ; grp=2 & A ; sec= & A ; key=1482 & A ; cmd=resetall. [ Accessed 23 May 2011 ]

MARGARET W. LINN, PHD, RICHARD SANDIFER, BS, and SHAYNA STEIN, . 1985.Effects of Unemployment on Mental and Physical Health. [ ONLINE ] Available at: hypertext transfer protocol: //www.ncbi.nlm.nih.gov/pmc/articles/PMC1646287/pdf/amjph00281-0056.pdf. [ Accessed 12 April 11 ]

Mohd Nadzri Mohd Nasir, Kon Mee Hwa, Huzaifah Mohammad. 2011.An Initial Study on the Forecast Model for Unemployment Rate. [ ONLINE ] Available at: hypertext transfer protocol: //www.statistics.gov.my/portal/images/stories/files/journal/ArticleIIIVol12008.pdf? phpMyAdmin=HsSjziTw4modEUBuL5A5eWr139e. [ Accessed 05 April 11 ]

Nazaria Baharudi. 1997.Unemployed Alumnuss: Pre and Post 1997 Crisis. [ ONLINE ] Available at: hypertext transfer protocol: //www.statistics.gov.my/portal/images/stories/files/journal/V104_Article_Nazaria.pdf? phpMyAdmin=HsSjziTw4modEUBuL5A5eWr139e. [ Accessed 12 April 11 ]

South Africa: Young, Educated and Unemployed – Global Issues. 2011.South Africa: Young, Educated and Unemployed – Global Issues. [ ONLINE ] Available at: hypertext transfer protocol: //www.globalissues.org/news/2009/06/30/1984. [ Accessed 23 May 2011 ]

ZALEHA MOHD NOOR a* , NORASHIDAH MOHAMED NOR B JUDHIANA ABDUL GHANI. 2008.The Relationship between Output and Unemployment in Malaysia: Does Okun ‘s Law exist? . [ ONLINE ] Available at: hypertext transfer protocol: //psasir.upm.edu.my/671/1/bab02.pdf. [ Accessed 12 April 11 ]

2011.A . [ ONLINE ] Available at: A hypertext transfer protocol: //emlab.berkeley.edu/~card/papers/origins-of-unemployment.pdf. [ Accessed 23 May 2011 ]

Unemployment – Wikipedia, the free encyclopaedia. 2011.Unemployment – Wikipedia, the free encyclopaedia. [ ONLINE ] Available at: hypertext transfer protocol: //en.wikipedia.org/wiki/Unemployment. [ Accessed 23 May 2011 ]

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