Determinants of youth unemployment rate in Malaysia / Farah Wahidah Abd Wahid

The high youth unemployment rate in Malaysia is not something new in the country's economic problems since it has been going on for several decades. Due to COVID-19, economic performance has been slowed down as many sectors are forced to shut down. However, when the economy starts to get better with many people getting vaccinated, the number of employed starts to increase, but not the unemployment rate. The Department of Statistics Malaysia mentions that the youth unemployment rate is higher than adult unemployment in Malaysia. The determinants of youth unemployment are the main objective of this research. The variables used are the inflation rate, gross domestic product, foreign direct investment, and population. This study focuses on Malaysia, with annual data for 30 years from 1991 to 2020. Data analysis will be done using 3 tests, which are descriptive analysis, correlation analysis, and multiple regression analysis on E Views software. Four assumption tests are also done for linear regression. The results showed that the inflation rate and population have a positive and significant relationship with the youth unemployment rate, whereas GDP and foreign direct investment have an insignificant relationship with the youth unemployment rate. The results of the study also suggested that policymakers need to take the youth unemployment rate seriously by creating a better understanding and making sure there are enough job opportunities in the labour market.