OBECTIVES FEM 4204 - UPM EduTrain Interactive …vodppl.upm.edu.my/uploads/docs/topik 3.pdf9/26/2011...

9/26/2011

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FEM 4204FEM 4204HUMAN CAPITAL PLANNING & HUMAN CAPITAL PLANNING &

DEVELOPMENT: THE GOVTDEVELOPMENT: THE GOVT

ZURONI MD. ZURONI MD. JUSOHJUSOHRESOURCE MGT AND CONSUMER STUDIES, FACULTY RESOURCE MGT AND CONSUMER STUDIES, FACULTY

OF HUMAN ECOLOGYOF HUMAN ECOLOGY

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OBECTIVESOBECTIVES

•• To analyze the human capital planning and To analyze the human capital planning and developmentdevelopment

•• To examine the current status of human capital To examine the current status of human capital development in Malaysiadevelopment in Malaysia

•• To examine the current status of human capital To examine the current status of human capital development in various countriesdevelopment in various countries

•• To understand the link between human capital To understand the link between human capital and labor supplyand labor supply

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REFERENCESREFERENCES

•• BeggBegg, D., Fischer, S., and , D., Fischer, S., and DornbuschDornbusch, R. (1987) , R. (1987) EconomicsEconomics, McGraw Hill, McGraw Hill

•• RahmahRahmah Ismail (1996) Ismail (1996) Modal Modal ManusiaManusia dandanPerolehanPerolehan BuruhBuruh, , DewanDewan BahasaBahasa & & PustakaPustaka

•• EigthEigth Malaysia Plan 2001Malaysia Plan 2001--20052005•• Seventh Malaysia Plan 1995 Seventh Malaysia Plan 1995 -- 20002000•• Ninth Malaysia Plan 2006 Ninth Malaysia Plan 2006 -- 20102010

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OUTLINEOUTLINE

•• Human capital planning and developmentHuman capital planning and development•• The current status of human capital The current status of human capital

development in Malaysiadevelopment in Malaysia•• Human capital development in various countriesHuman capital development in various countries

–– Less developed, developing and developed Less developed, developing and developed

•• Human capital and labor supplyHuman capital and labor supply

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Human Resource Planning and Human Resource Planning and DevelopmentDevelopment

•• Consisted of the following:Consisted of the following:1.1. Population Population 2.2. Labor force (Labor force (tenagatenaga buruhburuh))3.3. Employment (Employment (GunaGuna tenagatenaga) ) 4.4. EducationEducation

•• The goals:The goals:–– To increase productivity, per capita income and To increase productivity, per capita income and

income distributionincome distribution

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Human Resource Planning and Human Resource Planning and Development … Development … contcont

•• The scope:The scope:–– Improving human capitalImproving human capital–– Improving the capability of labor marketImproving the capability of labor market–– Controlling labor supply through population controlControlling labor supply through population control

•• The benefits:The benefits:–– Individuals: Individuals: job satisfaction; safety and personal job satisfaction; safety and personal

development; ensured with higher incomedevelopment; ensured with higher income–– Institutions:Institutions: Increased/improved creativity, Increased/improved creativity,

productivity and capability ~ increases profitproductivity and capability ~ increases profit

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DEMOGRAPHYDEMOGRAPHY SOCIALSOCIAL

The Framework ….The Framework ….

Birth rate; Mortality rate; Family Planning

Health; Nutrition; Poverty; urban dev

POPULATIONPOPULATION

LABORLABOR

Guna Tenaga

EDUCATIONEDUCATION

Tenaga buruh

Preparation; Allocation; Use

Econ aspects (formal & informal)

Non econ aspects

Production capabilities; Per capita Income; Income distribution

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Human Resource/Capital Planning and Human Resource/Capital Planning and Development … Development … contcont

1.1. The population planning and development:The population planning and development:–– Consisted of:Consisted of:

•• Demographic aspects:Demographic aspects: birth rate, mortality rate & birth rate, mortality rate & family planningfamily planning–– 70 million population policy plan70 million population policy plan–– RM8: Table 4.1RM8: Table 4.1

•• Social aspects:Social aspects: health, nutrition, poverty and urban health, nutrition, poverty and urban developmentdevelopment

–– It influences and related to the planning and dev It influences and related to the planning and dev of of •• Labor force; employment and educationLabor force; employment and education

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Human Resource/Captal Planning and Human Resource/Captal Planning and Development … Development … contcont

2.2. The Labor related planning and development:The Labor related planning and development:–– Consisted of:Consisted of:

•• Employment (guna tenaga)Employment (guna tenaga)–– Need to be planned so that the available labor force (tenaga Need to be planned so that the available labor force (tenaga

buruh) can be absorbedburuh) can be absorbed–– RM8: Table 4RM8: Table 4--22

•• Labor force (tenaga buruh)Labor force (tenaga buruh)–– In this aspect what need to be considered are:In this aspect what need to be considered are:

•• Preparation of entering the labor marketPreparation of entering the labor market•• Budget allocation for improving labor qualityBudget allocation for improving labor quality•• Efficient use of laborEfficient use of labor

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3.3. The educational planning and development:The educational planning and development:–– Consisted of 2 aspects:Consisted of 2 aspects:

•• Economic:Economic: formal and informal educationformal and informal education–– RM8: Table 4RM8: Table 4--5; Table 45; Table 4--6; Table 46; Table 4--7; Table 47; Table 4--99–– Government allocation for education and training: RM8 Table Government allocation for education and training: RM8 Table

44--99

•• Non economicNon economic ~ influence the attitude and charisma~ influence the attitude and charisma•• Both aspects are impt in the development of one’s Both aspects are impt in the development of one’s

personality and the quality of labor supplied.personality and the quality of labor supplied.

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•• In short, the process of improving human In short, the process of improving human capital: capital: –– Begin at the early stage of child development. Begin at the early stage of child development.

How?How?•• Through children’s nutrition intake and health Through children’s nutrition intake and health

–– The process continue when the children obtain The process continue when the children obtain formal and informal educationformal and informal education

–– When the children finished schooling, they receive When the children finished schooling, they receive training to improve their human capital.training to improve their human capital.

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HRD and Planning: What is done so far? HRD and Planning: What is done so far? •• RM7RM7 –– achieved sustained econ growth achieved sustained econ growth

through: through: –– Increase productivity from increased investment in Increase productivity from increased investment in

HRD and new technologyHRD and new technology–– Efficiency in use of labor (unemployment rate is Efficiency in use of labor (unemployment rate is

low)low)–– Strengthening the human resource base Strengthening the human resource base

•• Thus, the SS of highly skilled and trained manpower Thus, the SS of highly skilled and trained manpower increased due to expansion in education and training increased due to expansion in education and training institutionsinstitutions

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•• RM8 RM8 –– The economy moves towards higher The economy moves towards higher capitalcapital--intensity and knowledgeintensity and knowledge--based based production process.production process.–– Thus, the HRD&P goal: to create a critical mass of Thus, the HRD&P goal: to create a critical mass of

trained, skilled and knowledge manpower with the trained, skilled and knowledge manpower with the right motivation and attitude right motivation and attitude to optimize the use and to optimize the use and development of new technologies and materialsdevelopment of new technologies and materials

•• Thus, in RM8 the HRD focus on the enhancement Thus, in RM8 the HRD focus on the enhancement of the qualitative aspects of human resourcesof the qualitative aspects of human resources

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Human Resource /Capital Planning and Human Resource /Capital Planning and Development … Development … contcont

•• Human Resource Policy Thrust: RM8Human Resource Policy Thrust: RM8–– Promoting lifelong learning to enhance employability and Promoting lifelong learning to enhance employability and

productivity of the labor forceproductivity of the labor force–– Optimizing the utilization of labor forceOptimizing the utilization of labor force–– Increasing the SS of S&T manpowerIncreasing the SS of S&T manpower–– Accelerating the implementation of the productivityAccelerating the implementation of the productivity--linked linked

wage syswage sys–– Strengthening labor mkt info sys to increase labor mobilityStrengthening labor mkt info sys to increase labor mobility–– Promoting M’sia as a regional center of educational Promoting M’sia as a regional center of educational

excellenceexcellence–– Reinforcing positive valuesReinforcing positive values

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•• Human Resource Policy Thrust: RM8Human Resource Policy Thrust: RM8–– Expand the SS of highly skilled and kExpand the SS of highly skilled and k--manpower to manpower to

support the development of ksupport the development of k--economyeconomy–– Increase the accessibility to quality educations and Increase the accessibility to quality educations and

training to enhance income generation capabilities training to enhance income generation capabilities and QoLand QoL

–– Improving the quality of teaching and learning Improving the quality of teaching and learning materials, teacher training and educational support materials, teacher training and educational support services to ensure that manpower SS is in line with services to ensure that manpower SS is in line with technological change and mkt DDtechnological change and mkt DD

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•• RMK 9: Teras keRMK 9: Teras ke--22–– Meningkatkan keupayaan pengetahuan, kreativiti Meningkatkan keupayaan pengetahuan, kreativiti

dan innovasi negara serta memupuk “minda kelas dan innovasi negara serta memupuk “minda kelas pertama”pertama”

–– Apa yang dirancang?Apa yang dirancang?•• 2 buah universiti di Terengganu dan Kelantan2 buah universiti di Terengganu dan Kelantan•• RM 1.15 billion RM 1.15 billion –– menambahbaik kemudahan sekolah menambahbaik kemudahan sekolah

luar bandar khususnya di Sabah dan Sarawakluar bandar khususnya di Sabah dan Sarawak•• Bina 180 sekolah rendah, 229 sekolah menengah dan Bina 180 sekolah rendah, 229 sekolah menengah dan

sekolah berasrama penuhsekolah berasrama penuh

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•• RMK 9: RMK 9: –– Apa yang dirancang?Apa yang dirancang?

•• RM 690 juta RM 690 juta –– membina rumah guru sebahagiannya di membina rumah guru sebahagiannya di kawasan luar bandarkawasan luar bandar

•• RM 1.51 billion RM 1.51 billion –– program pengkomputeran sekolah program pengkomputeran sekolah dan RM 284 juta utk program pembestarian sekolahdan RM 284 juta utk program pembestarian sekolah

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•• The measurement:The measurement:1.1. Human capital stockHuman capital stock

•• The number of population completed their education The number of population completed their education at various levelat various level

•• The number of labor force in professional occupations The number of labor force in professional occupations (e.g. medical doctors, engineers) compared with the (e.g. medical doctors, engineers) compared with the total populationtotal population

2.2. Human capital development rate within a periodHuman capital development rate within a period•• Net increase in the number of people in high level Net increase in the number of people in high level

jobsjobs

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•• Other measurements/indicators:Other measurements/indicators:1.1. Number of teachers per 10,000 populationsNumber of teachers per 10,000 populations2.2. Number of engineers and scientist per 10,000 Number of engineers and scientist per 10,000

poppop3.3. Number of doctors and dentists per 10,000 popNumber of doctors and dentists per 10,000 pop4.4. Ratio of students registered at lower educational Ratio of students registered at lower educational

level to the total number of pop aged bet 5 to level to the total number of pop aged bet 5 to 14 yr14 yr

5.5. Ratio of students registered at tertiary Ratio of students registered at tertiary educational level to the total number of pop educational level to the total number of pop aged bet 20 to 24 yrsaged bet 20 to 24 yrs 20

Human Capital and Labor SupplyHuman Capital and Labor Supply

•• Labor supply:Labor supply:–– Is linked to time allocation (mkt work vs other activities), Is linked to time allocation (mkt work vs other activities), –– Time is exchanged for income Time is exchanged for income –– In the short run, In the short run,

•• how long does one work to earn income is dependent upon the how long does one work to earn income is dependent upon the following:following:

–– Wage rate; unearned income; income of the spouse; no of children; Wage rate; unearned income; income of the spouse; no of children; household work; community workhousehold work; community work

•• Individuals cannot change the market wage rateIndividuals cannot change the market wage rate•• Wage rate differentials occur due to differences in individual labor Wage rate differentials occur due to differences in individual labor

quality (skill, knowledge, health etc)quality (skill, knowledge, health etc)

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Human Capital and Labor SupplyHuman Capital and Labor Supply … cont… cont

•• In the long run,In the long run,–– Human capital can be upgraded through education and Human capital can be upgraded through education and

training which in turn influence the labor earningtraining which in turn influence the labor earning–– The decision to offer/supply laborThe decision to offer/supply labor

•• is related to the is related to the “desired education level”“desired education level” (i.e. accept low paying (i.e. accept low paying job that offers OJT and high paying job that require transfers to job that offers OJT and high paying job that require transfers to someplace elsesomeplace else

•• Influence family wellbeingInfluence family wellbeing–– To ensure better future, achieve higher wellbeing and standard of To ensure better future, achieve higher wellbeing and standard of

living, one is willing to spend money on tuition, move to someplace living, one is willing to spend money on tuition, move to someplace else, get a new jobelse, get a new job

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•• In the long run,In the long run,–– The adjustment of labor involve assessment of The adjustment of labor involve assessment of

current cost (low wage, transfer to someplace else) current cost (low wage, transfer to someplace else) and future and future return.return.•• Thus, this adjustment is called Thus, this adjustment is called INVESTMENTINVESTMENT•• The LR labor SS theory is called the The LR labor SS theory is called the Theory of Human Theory of Human

capital investment decisioncapital investment decision

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•• Types of Investment in Human CapitalTypes of Investment in Human Capital–– Investment in the workplaceInvestment in the workplace

•• Formal and informal trainingFormal and informal training

–– Investment outside the workplaceInvestment outside the workplace•• SchoolingSchooling•• HealthHealth•• Seeking for employmentSeeking for employment

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•• Measurement of Human CapitalMeasurement of Human Capital–– The two main components: Education and trainingThe two main components: Education and training–– Thus, human capital measurement is based on the Thus, human capital measurement is based on the

return of these two componentsreturn of these two components–– The return of other human capital components such The return of other human capital components such

as health and migration are difficult to measureas health and migration are difficult to measure

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•• The rate of return on educationThe rate of return on education–– Formally, it is the interest rate that equates the cost Formally, it is the interest rate that equates the cost

of the investment with the present value of the of the investment with the present value of the stream of future benefits from the investmentstream of future benefits from the investment

–– E.gE.g Bob is contemplating an ‘O’ Level/SPM at age Bob is contemplating an ‘O’ Level/SPM at age 17 and expects to retire at age 5617 and expects to retire at age 56..

THANK YOUTHANK YOU

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