Female labour force participation, infant mortality and fertility in Malaysia

Abstract

In reviewing the population policy in 1984, the Malaysian government called for a major shift from family planning to family and human resource development to achieve an ultimate population of 70 million by 2100. However, regardless of the government's initiatives since 1984, Malaysia's fertility rate still declined. This study examines the short-run and long-run relationship and causality between female labour force participation rate, infant mortality rate and fertility in a developing country in Asia – Malaysia. We employ the unit root test which allows for two structural breaks, and the break dates are then used as dummy variables in the bounds testing procedure within an autoregressive distributed lag (ARDL) modelling approach and Granger-causality test. The results indicate that mortality changes have a significant and positive long-run impact on fertility rate and women's child bearing decisions are unaffected by their employment situation. In addition, we do not find evidence that presence of children hinders re-employment and continuous female employment.

Keywords:

• fertility
• female labour force participation
• bounds testing approach
• Granger causality

JEL Classifications:

• J1
• J2

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The survey was based on the type of child care parents used for children below 7 years of age in 2006.

2. For each dependent children below 18 years, RM1000 tax relief given to the family.

3. Women in Indonesia, Thailand and South Korea are entitled to 90 days of fully paid maternity leave; Singaporean women are entitled to 16 weeks of fully paid maternity leave.

Additional information

Funding

This work was supported by the Fundamental Research Grant Scheme (FRGS) from the Malaysian Ministry of Higher Education Malaysia [grant number FRGS/2/2013/SS07/MUSM/03/1] and the Social & Economic Transformation in Asia (SETA), Monash University Malaysia.

Notes on contributors

Audrey K.L. Siah

Dr Audrey K.L. Siah is an academic at the Department of Economics, Monash University Malaysia campus. She is involved in research covering the areas of applied macroeconomics and international economics.

Grace H.Y. Lee

Dr Grace H.Y. Lee is an associate professor at the Department of Economics, Monash University Malaysia campus. She is actively involved in research covering the areas of labour economics, applied macroeconomics, monetary economics and social capital. She has published her work in some of the leading economics journals, e.g. Applied Economics, Economic Modelling, Journal of the Asia Pacific Economy, Journal of the Japanese and International Economics, Journal of Asian Economics and the Public Choice.