Determinants of unemployment rate in Malaysia / Noreen Qistina Nordzlan

This study examines the determinants of unemployment rate in Malaysia. The dependent variable in this study is unemployment rate (UEM). There are five selected independent variables in this study which are gross domestic product growth (GDP), real interest rate (INR), foreign direct investment (FDI), population growth (POP) and trade openness (TO). This study used quantitative secondary data which are time series data and multiple regression models that represented by the Ordinary Least Square (OLS) regression as to investigate the effect of independent variables towards dependent variable. The period of data covered from 1989 until 2019. Based on the previous researcher, Shu Chen (2005), the evidence shows that there is no relationship between FDI inflow and unemployment. Population is seen to have a positive relationship with the level of unemployment stated by (Bakare A.S, 2011). According to the Cheema & Atta (2014), there is statistically significant negative relationship between openness of trade and unemployment in the long run and in short-run. Chowdhury & Hossain (2014) states that GDP growth has negative impact on unemployment. Interest rate have negative and insignificant impact on unemployment rate stated by the (Arshad et.al, 2016).