WOMEN PARTICIPATION IN MALAYSIA INFORMAL SECTOR, CHALLENGES, AND POLICY IMPLICATION: OVERVIEW ON LITERATURE PERSPECTIVE

Abstract

The informal sector is a major part of the Malaysian economy, and there is still insufficient information about the informal economic activities in Malaysia. In the term, 'informal economy' became current as a label for economic activities which take place outside the framework of corporate public and private sector establishments. According to International Labor Organization (ILO), the common characteristics of the informal enterprise includes the ease of entry, reliance on an indigenous resource, family ownership, small scale operations, labour-intensive and adaptive technology, skills acquired outside of the formal sector, unregulated and competitive markets. The objective of this paper is to identify the participation of informal sector among women in Malaysia. How much females participate in the informal sector and why they participate. This paper also discusses the challenges and opportunities of women participating in the informal sector in Malaysia to explain why females participate in the informal sector and the policy implications of their participation. The study found that the major challenges of women involved in informal activities which are financial difficulties, social security protection, low income, and low productivity activities with no rules/regulation. Despite all these challenges, these women are very positive about their employment and business. While informality offers greater labour flexibility, it can also exacerbate economic inefficiency and labour vulnerability. There are separate policy options for formalising workers and firms. To maximise the positive and minimise the negative, indiscriminate formalisation is ill-advised. The importance of local context in policy design is also highlighted