July 11, 2019
Written by WID.world

New paper on income inequality and ethnic cleavages in Malaysia, 1984-2014

This new paper by Muhammed Abdul Khalid and Li Yang (and the associated issue brief) documents the evolution of income inequality in Malaysia, not only at the national level (for the period of 1984-2014) but also by ethnic group (for the period of 2002-2014). We combine information obtained from national accounts, household surveys, fiscal data, and demographic statistics.

This research shows that Malaysia’s exceptional economic growth rate has been inclusive. For the period of 2002 – 2014, the real income growth for the bottom 50% is the highest (5.2%), followed by the middle 40% (4.1%), the top 10% (2.7%) and then the top 1% (1.6%). However, while average growth rates are positive across all ethnic groups (Bumiputera 4.9%, Indians 4.8%, and Chinese 2.7%), the highest growth of real income per adult accrued to the Bumiputera in the top 1% (at 8.3%), which sharply contrasts the much lower growth rate of the Indians (at 3.4%) and negative income growth rates of the Chinese (at -0.6%).