Discrimination of high degrees: race and graduate hiring in Malaysia

Abstract

This paper investigates racial discrimination in hiring fresh degree graduates in Malaysia through a field experiment. We send fictitious Malay and Chinese résumés to job advertisements, then analyse differentials in callback for interview attributable to racial identity, while controlling for applicant characteristics, employer profile and job requirements. We find that race matters much more than résumé quality, with Malays – Malaysia's majority group – significantly less likely to be called for interview. Other factors, particularly language proficiency of employees, language requirements of jobs and profile of employers, influence employer biases. Applicants fluent in Chinese fare better, and Chinese-controlled and foreign-controlled companies are more likely to favour Chinese résumés, indicating that cultural compatibility explains part of the discrimination. Malay résumés tend to be perceived and prejudged adversely, and employers' attitudes towards public policy outcomes, particularly pertaining to education quality and employment opportunity in the public sector, also account for the observed racial disparities.

Keywords:

• discrimination
• labour market
• race
• education
• Malaysia

JEL Classifications:

• J15
• J71
• J78
• I24

Acknowledgements

The authors thank Amzar Hafifi, Clarence Choong and Low Iishan for excellent research assistance. We appreciate valuable help and insight from Alyssa Schneebaum, Michael Carr, Cheong Kee Cheok and Mavis Puthucheary, participants of seminars at the University of Malaya and the National University of Malaysia, but of course implicate none of them for the contents of this paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Bumiputera, or ‘sons of the soil’, refers to the Malays and other indigenous groups, which we term non-Malay Bumiputera. The public sector employs about 1.3 million, or 10% of the employed population.

2. Affirmative action derives from Constitutional provisions, specifically Article 153, which states that the Yang Di-Pertuan Agong (national king) shall safeguard the ‘special position’ of the Malays and other indigenous people and protect the legitimate interests of the non-Malay communities. It provides for the Yang Di-Pertuan Agong to reserve for the Malays, if necessary, positions in the public service, scholarships or educational or training privileges, and permits or licenses.

3. Shahul Hamid Abdullah, Director General of the National Civics Bureau, maintained in January 2010 that the civil service is not discriminatory (‘Emphasis on raising standards’, 30 January 2010, www.thestar.com.my). Lim Teck Ghee and Ramon Navaratnam, in response, wrote of Malay dominance in the Malaysian civil service (‘Ethnic dominance in the Malaysian civil service’, 8 February 2010 (www.english.cpiasia.net).

4. In May 2006, the then Deputy Prime Minister Najib Razak alleged that employers' stipulating Mandarin proficiency as a job requirement constituted discrimination (‘Mandarin demand is discriminatory’, 31 May 2006, www.thestar.com.my). In May 2010, Pasir Mas MP and Perkasa chief Ibrahim Ali accused the private sector of prejudice against the Malay and Bumiputera workforce (‘MPM tidak rasis’ [MPM, the Malay Consultative Council, is not racist], 31 May 2010, www.utusan.com.my).

5. In 2010, 29.9% of the Malay labour force had attained tertiary education, more than 25.1% for the Chinese labour force (Department of Statistics 2010). However, the tertiary-educated Malay workforce recorded a higher unemployment of 3.7%, compared to 2.6% for Chinese (Authors' calculations from Department of Statistics 2010).

6. Senior management refers to members of the management committee, CEOs and executives who report directly to the CEO.

7. In 2010–2011, the student body of Malay-medium national primary schools comprised 94% Bumiputeras, 1% Chinese, 3% Indians and 2% others, while Chinese-medium national-type schools comprised 88% Chinese, 9% Bumiputeras, 2% Indians and 1% others. Tamil-medium schools had a 100% Indian population (Malaysia 2012, 3–23).

8. Among résumés with CGPA of 3.1 or above, 53.3% had held at least one leadership position while at school and 4.5% indicated no involvement in extra-curricular activities. For those with CGPA at or below 3.0, 41.3% held some leadership position, while 13.4% did not indicate any activities.

9. Lee (2012) shows that tertiary-educated Chinese are substantially more concentrated in the private sector, comprising 56% of private sector professionals compared to 20% of public sector professionals.

10. Data on size of workforce, the most appropriate measure of company size, are not maintained by Malaysian authorities. Company revenue records are available, but only for one-third of the companies in our sample.

11. Jobstreet, a leading employment portal, surveyed 571 human resource managers in October 2011, and found the following top reasons fresh graduates were rejected after interview: 64% held unrealistic salary demands, 60% showed ‘bad character, attitude and personality of the jobseekers’, and 56% revealed poor command of English (Retrieved from http://www.jobstreet.com.my/aboutus/preleases163.htm).

Additional information

Funding

This work was supported by the University of Malaya Research [Grant number RG112-11SBS].

Notes on contributors

Hwok-Aun Lee

Hwok-Aun Lee is a senior lecturer in the Department of Development Studies, Faculty of Economics and Administration, University of Malaya. He has researched and published in the areas of affirmative action, inequality, labour, social policy, discrimination and education.

Muhammed Abdul Khalid

Muhammed Abdul Khalid is a research fellow in the Institute of Malaysian and International Studies (IKMAS), University Kebangsaan Malaysia. His research interest includes issues related to economic inequality and socio-economic development.