The Only Way Is Up?

Industry Overview - The study focuses on economic mobility in Malaysia from 2004 to 2022, analyzing poverty dynamics, vulnerability, and income mobility using a synthetic panel approach based on nationally representative household survey data [4][10] - The research employs three scenarios for setting poverty lines and investigates absolute and relative mobility across income groups, with a particular focus on chronic poverty and economic security [10][12] Key Findings on Poverty Dynamics - Chronic poverty in Malaysia decreased significantly from 22-28% of the population in 2004-2007 to 2-3% in 2019-2022, with the share of consistently non-poor individuals rising to around 88% [66] - Poverty entry rates declined from 13-21% in 2004-2007 to 3-5% in 2019-2022, indicating improved economic conditions and reduced vulnerability [66] - Conditional probabilities show that chances of escaping poverty increased from 29-41% in 2004 to 60-76% in 2019-2022, while the likelihood of remaining poor decreased from 59-71% to 24-40% over the same period [70] Subgroup Analysis - Ethnic disparities in chronic poverty have narrowed, with Bumiputeras experiencing a decline from 30-35% in 2004-2007 to 3-5% in 2019-2022, while Chinese Malaysians and Indian Malaysians saw reductions to 0.5% and 1-2%, respectively [74] - Regional disparities persist, with rural East Malaysia having the highest chronic poverty rate at 13-17% in 2019-2022, compared to 1% in urban Peninsular Malaysia [82] - Poverty entry remains high in rural East Malaysia, with 6-14% of the population falling into poverty in each interval, indicating ongoing vulnerability [86] Economic Mobility and Vulnerability - Under scenario 1, the share of the population classified as persistently economically secure increased from 17-21% in 2004-2007 to 50-55% in 2019-2022, while downward mobility decreased from 15-21% to 11-16% [99] - Scenario 2, which uses higher income thresholds, shows that 31-36% of Malaysians achieved middle/upper class status by 2019-2022, but downward mobility remained significant at 15-21% [103] - Urban Peninsular Malaysia has a much higher share of persistently secure individuals (60-64%) compared to rural East Malaysia (12-16%), highlighting stark regional inequalities [111] Relative Mobility - Relative mobility between income quintiles remained stable, with 24-32% of the population experiencing upward mobility and 27-34% experiencing downward mobility in any given interval [116] - Persistence at the top and bottom of the income distribution is notable, with 9-12% of the population remaining in the bottom quintile and 11-14% staying in the top quintile over time [118] - Ethnic differences in mobility are evident, with Chinese Malaysians more likely to remain in the top quintile (22-29%) compared to Bumiputeras (7-10%) [121] Conclusion - The study concludes that while absolute poverty has decreased significantly, relative mobility remains low, with persistent inequalities between regions and ethnic groups [135][136] - Rural East Malaysia continues to face the highest levels of chronic poverty and vulnerability, with limited upward mobility and frequent poverty entry [130][132]