KUALA LUMPUR – Malaysia has a high rate of educational, occupational and economic mobility, where rags-to-riches stories are possible, according to a study by the Khazanah Research Institute (KRI).

The study interviewed 4,999 parent-child pairs in a representative survey conducted throughout Malaysia and compares parents who were 35 years old between 1980 and 1995 and their adult children aged 25 to 40 in 2015.

Its latest publication “Climbing the Ladder: Socio-economic Mobility in Malaysia” found that in terms of educational mobility, 62% of children are better educated than their parents. Among those born to parents without formal education, 33% have attained tertiary education.

In terms of occupational skill mobility, 76% of those whose parents had a low-skill occupation now have a medium-skill or high-skill occupation. About 37% of the children are better skilled than their parents.

The study also revealed that children’s income is fairly independent of parents’ income. Children born to parents in the bottom quintile do not generally stay poor as adults, while those born to parents in the top quintile do not necessarily stay rich as adults.

“Malaysia is a mobile society. One’s starting point is not the most important factor for mobility,” KRI chairman Tan Sri Nor Mohamed Yakcop said at the launch of the publication last Friday.

“The challenge is to keep the momentum of mobility to make sure the income of the people is enough for them to live a reasonably good life,” he said.

The study analyses the existence and extent of inter-generational mobility in Malaysia, in terms of educational attainment, occupational skills level and income.

However, it found that there is a middle-class squeeze for children born to middle-income parents. Many of these children do not only move down the income ladder, they also earn less than their parents.

Director of research Dr Muhammed Khalid said more emphasis should be placed on the socio-economic growth of the middle class as they are more vulnerable to experience downward socio-economic mobility, without reducing the support for the pockets of poverty which still persist.

“Inclusive development is vital in enhancing socio-economic mobility in order to promote social cohesion and greater equity for the next generation,” Muhammed said.

Other policy implications are to facilitate wider access to education opportunities that can enhance upward mobility.
The study observes that only 5% of Indians born to parents without formal education have attained tertiary education, compared with 44% for the Chinese and 33% for bumiputras.

Muhammed called for policies focusing on removing gender barriers and encouraging higher female participation in the labour market to be continued.

Policies that focus on assisting children from rural areas are also vital while policies that raise income and purchasing power must be pursued, he added.