Case Study Assignment Eco415 ( (Macroeconomics)

CASE STUDY ASSIGNMENT MACROECONOMICS (10%)
Fewer unemployed persons in January 2023

PUTRAJAYA: The number of unemployed persons in Malaysia continued to decrease in
January this year with a reduction of 0.6 per cent to 596,100 persons compared to 599,600
persons in December 2022, according to the Statistics of Labour Force Malaysia. It said
Malaysia's employment rate in January this year remained at 3.6 per cent.
Commenting on the statistics, Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said in
January, the country's labour market continued on an upward trend following the current
improvement of the country's economic position, in keeping with the expansion of the global
economy.
Therefore, he said the number of the labour force in January has improved further, increasing
by 0.2 per cent month-on-month to 16.76 million persons compared to 16.73 million persons
in December 2022.
The labour force participation rate during the month remained at 69.8 per cent. "The positive
scenario was contributed by an increase in the number of employed persons, whereas the
number of unemployed persons continued to decrease," he said in a statement.
Mohd Uzir said the number of employed persons in January further increased by 0.2 per cent
month-on-month to record 16.16 million persons compared to 16.13 million persons in
December 2022.
On the employment situation, he said the employees' category accounted for 75.7 per cent of
the total employed persons in January 2023 as it recorded a marginal increase of 0.1 per
cent, reaching a total of 12.24 million persons compared to 12.23 million persons in
December 2022.
"A similar trend was observed in the own-account workers, with an increase of 0.6 per cent to
record 2.88 million persons (December 2022: 2.86 million persons)," he said.
In terms of the economic sector, Mohd Uzir said the number of employed persons in the
services sector continued to increase, largely in wholesale and retail trade; food & beverage
services; and administrative & support service activities. A similar trend of employment was
also observed in the manufacturing, construction and mining & quarrying sectors, as well as
in the agriculture sector, he added.
Source: Bernama, 9 March 2023
Answer all questions.

a. Define unemployment. How to calculate the unemployment rate.
Unemployment is a macroeconomic indicator that refers to the condition of individuals
who are willing and able to work but are unable to find suitable employment opportunities.
In other words, it represents the portion of the labor force that is actively seeking
employment but remains unemployed. To calculate the unemployment rate, the following
formula is used:
Unemployment Rate = (Number of Unemployed Persons / Labor Force) * 100
Where:
 Number of Unemployed Persons: The total number of individuals who are

unemployed and actively seeking employment.
 Labor Force: The sum of employed persons and unemployed persons actively
seeking employment.
b. What factors made an upward trend of labour market in January?

The factors that contributed to the upward trend of the labor market in January are
mentioned in the article:
Improvement in the country's economic position: The article states that the labor market
improvement is following the current improvement of the country's economic position. A
growing economy tends to generate more employment opportunities.
Expansion of the global economy: The labor market improvement is also attributed to the
expansion of the global economy. When the global economy grows, it positively impacts
export-oriented industries and generates more jobs domestically.
c. Based on paragraph 4….. “ The labour force participation rate during the month remained
at 69.8 per cent”, what do you understand about labour force participation rate and why
its remained at 68.9%?
The labor force participation rate refers to the percentage of the working-age population
that is either employed or actively seeking employment. It is calculated using the
following formula:
Labor Force Participation Rate = (Labor Force / Working-Age Population) * 100
In this case, the labor force participation rate remained at 69.8 per cent in January. The
rate remains constant when the changes in the labor force (due to changes in
employment and unemployment) are proportional to the changes in the working-age
population. In other words, the growth rate of the labor force is in line with the growth rate
of the working-age population.
d. Based on the article identify the primary sector, secondary sector and tertiary sector in
Malaysia which employed person were actively involved.
Based on the article, the primary, secondary, and tertiary sectors in Malaysia that
employed persons were actively involved in are as follows:
Primary Sector: The article mentions employment in the agriculture sector, which is part
of the primary sector.
Secondary Sector: The article mentions employment in the manufacturing, construction,
and mining & quarrying sectors, which are part of the secondary sector.
Tertiary Sector: The article mentions employment in the services sector, including
wholesale and retail trade, food & beverage services, and administrative & support
service activities. The services sector falls under the tertiary sector.
e. Explain the types of fiscal policy and monetary policy that can be used to reduce
unemployment.
Fiscal Policy: Fiscal policy involves the use of government spending and taxation to
influence the economy. To reduce unemployment, expansionary fiscal policy can be
implemented, which involves:
Increasing government spending: The government can invest in infrastructure projects,

education, healthcare, and other sectors, creating job opportunities directly or indirectly.
Cutting taxes: Lowering taxes for individuals and businesses can stimulate consumption
and investment, leading to increased economic activity and job creation.
Monetary Policy: Monetary policy is controlled by the central bank and involves managing
the money supply and interest rates. To reduce unemployment, expansionary monetary
policy can be employed, which includes:
Lowering interest rates: Lower interest rates encourage borrowing and spending by
consumers and businesses, which can boost economic activity and create jobs.
Quantitative easing: The central bank can buy financial assets from banks, injecting
money into the economy, and increasing the availability of credit for businesses and
individuals, thereby stimulating economic growth and job creation.
f. Discuss any two (2) types of unemployment.

Frictional Unemployment: This type of unemployment occurs when individuals are
temporarily unemployed as they transition between jobs. It is considered to be a natural
and normal part of the labor market as people take time to search for jobs that best
match their skills and preferences.
Structural Unemployment: Structural unemployment arises when there is a mismatch

between the skills and qualifications of the workforce and the requirements of available
jobs. Changes in technology, shifts in industries, or changes in consumer demand can
lead to certain skills becoming obsolete, leaving workers unemployed in specific sectors.
Structural unemployment requires retraining or relocation of the workforce to fill positions
in growing industries.
END OF QUESTIONS

Case Study Assignment Eco415 ( (Macroeconomics)

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CASE STUDY ASSIGNMENT MACROECONOMICS (10%)

Fewer unemployed persons in January 2023

Answer all questions.

 Number of Unemployed Persons: The total number of individuals who are

b. What factors made an upward trend of labour market in January?

Labor Force Participation Rate = (Labor Force / Working-Age Population) * 100

Increasing government spending: The government can invest in infrastructure projects,

f. Discuss any two (2) types of unemployment.

Structural Unemployment: Structural unemployment arises when there is a mismatch

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