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Income Shares and Education

Education increases income share and reduce wealth gap

Education forms the backbone of any society. The importance of education can never be overemphasized and the lack of it causes instability, rise in poverty and ignorance. It also plays a big role in income and wealth!

Top 20% income earners in Malaysia are 63% Tertiary Educated.
Middle 40% income earners in Malaysia are 25% Tertiary Educated.
Bottom 40% income earners in Malaysia are 96% SPM and below.

Income Shares and Education

Tertiary-educated individuals have an average of RM182,000 in wealth to their name versus SPM holders’ RM82,000. Degree holders have at least 2.2 times the wealth of SPM leavers.

However the tertiary education penetration rate (enrolment not completion) for Malaysia stands at only 36.5%. This is behind “very high human development” nations’ average of 75%, we are also behind “high human development” nations’ average of 50%.

In contrast, 86% of Americans, 84% of Kiwis, 100% of Koreans, 99% of the British, 45% of Thais, and 38.4% of Turks are university-trained.

As a result, the bulk of our workforce is unable to position themselves in higher-earning jobs. The bulk of our jobs involve the lower portions of the industry value chains.

How are we then to move our economy into higher GNI territory, and inclusively move the majority of our population into higher income brackets? Current practice of relying on one-off mega construction projects will not ensure Malaysia move into high-income status, and stay there for the long run!


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