Job Polarisation: The Change of Nature of Task and Skill Needs

Abstract

Job polarisation is the growth of high- and low-skilled employment relative to middle-skilled employment, typically in developed countries. Based on Khazanah Research Institute’s (KRI) descriptive study in 2017, Malaysia’s workforce experienced job polarisation over the last two decades. This study uses a different approach, i.e. multinomial logistic regression, to measure the probability of employment choice by different job categories to validate the presence of job polarisation in Malaysia. Unlike past research that used headcounts based on wage quantiles, this paper considers the individual and sectoral effects. This study confirms the job polarisation finding of KRI (2017) by comparing Malaysia’s employment structure between 2011 and 2017. Technology changes the methods and skills required to perform the same tasks. Besides, the adoption of technology depends on the firm’s or industry’s foresight of how technology may change the productivity of the worker. If the investment cost of a technology is greater than the training cost, firms may not adopt the technology. If an industry has the foresight of how technology may change the performance of tasks, and recruit workers in tandem with upskilling programmes, the phenomenon of job polarisation will fade out eventually.