Education and Earnings in the Malaysian Information, Communication, and Technology Sector: The Role of Certificates of Qualification

Norhanishah Mohamad Yunus

Abstract


The purpose of this study is to examine the returns to education at the different level of highest certificate qualification in the information, communication, and technology (ICT) sector in Malaysia. To do so, we rely on Household Income Survey covering period 2002-2007. We employ simple ordinary least squares estimator with robust standard errors to estimate the Mincerian equation. Our main finding shows that although the returns to degree qualification are remaining higher than other levels of qualification, but the trend of returns for degree-educated workers are found to be declining between 2002 and 2007. The “over-education” situation occurring in the ICT sector might be evidence that the returns to a first degree are falling. The results also report that the returns to education show a nonlinear relationship between certificates of qualification and earnings; with the returns to workers with Middle Certificate Education/Vocational is higher than Higher School Certificate and diploma workers during the period investigation. The findings from this study will not only potentially inform policy makers of the effectiveness of different types of certificate qualification but also determine the labor demand and supply conditions in the Malaysian ICT sector.

Aus. J. Acc. Eco. Fin. Vol 3(1), April 2017, P 37-50


Keywords


Returns to Education; Earnings; Non-linear; Certificates of Qualification; Over-education; Degree-educated Workers

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