Summary
The Labour Market Competitiveness Index (LMCI)empowers policymakers with reliable and up-to-date information, enabling them to identify gaps, align policies with labour market needs, and support informed decision-making. It provides a snapshot view of the labour market dynamics by integrating three core pillars namely labour supply, labour demand and labour market efficiency.
The LMCI shows that Malaysia’s labour market exhibited good performance growth between 2017 and 2019, prior to the pandemic-led crisis. However, the trend reversed after the pandemic hit the economy in 2020, resulting in disruption to the country’s labour market.
The decline in the LMCI is mainly driven by the Job Market Efficiency pillar. This highlights the need for policymakers to focus on stimulating the job market efficiency and addressing factors affecting it to enhance the overall competitiveness.
There are several key applications of LMCI to be considered which include integrating the LMCI with other macroeconomic models and labour market information infrastructure, and incorporating additional indicators for a more comprehensive labour market health metrics.
