Table 1 Description of variables

Hourly wage

The hourly wages is the sum of basic salary, allowances and bonuses

The hourly wage is calculated by the following formula:

\(hourly wage=\frac{\frac{12 months}{52 week}\times monthly\,salary}{weekly\,hours}\)

Log hourly wage

Due to positive skew in the hourly wage, the log hourly wage should be used to fit the model

Immigrant

A dummy variable. The worker considers as immigrant if he/she is a non-Malaysian regardless of their country of origin and place of birth. (1 if the worker is immigrant and 0 if native)

Male

Corresponds to the gender of the workers (1 if male and 0 if female)

Married

Corresponds to the marital status. (1 if married or ever married 0 if single)

Training

This variable corresponds to the duration of training attended, measured in month

Tenure

This variable corresponds to the years of tenure with current employer

Tenure square

The worker’s tenure is not normally distributed. Thus, the square of length of tenure should be used in the analysis

Potential experience

Potential experience in the labour market. The potential experience is calculated by the following formula:

\(Potexp=\left[Age-6-\left(years\,of\,education\right)\right]-\frac{unemployment\,period,\,in\,month}{12\,months}\)

Potential experience square

The potential experience is not normally distributed. Thus the square of potential experience should be used

Degree

A dummy variable for workers who completed up to degree education (1 if completed degree and 0 otherwise)

Diploma

A dummy variable for workers who completed up to diploma education (1 if completed diploma and 0 otherwise)

Upper secondary

A dummy variable for workers who completed up to upper secondary school (1 if completed upper secondary and 0 otherwise)

Lower education (Reference group)

A dummy variable for workers who completed up to lower education (1 if below upper secondary and 0 otherwise)

Management

This dummy variable refers to the type of job at current job (1 if management and 0 otherwise)

Professional

This dummy variable refers to the type of job at current job (1 if professional and 0 otherwise)

Skilled

This dummy variable refers to the type of job at current job (1 if skilled production and 0 otherwise)

Unskilled

This dummy variable refers to the type of job at current job (1 if unskilled production workers and 0 otherwise)

Non Production/apprentice (Reference group)

This dummy variable refers to the type of job at current job (1 if the worker is non production worker or apprentice and 0 otherwise)

Union

This dummy variable corresponds to the membership of of the workers in the trade union (1 if a member of trade union and 0 otherwise)

Vacancies

This variable corresponds to the vacancy rate in 2006, calculated as the rate of total number of vacancies over the total number of workers in the firm

Vacancies duration

This variable refers to the average duration (reported in weeks) to fill up the recent vacancies in the firm. The vacancy duration only refers to filled vacancies

Small firm (Reference group)

This dummy variable refers to the firm size by number of employees (1 if a small size firm and 0 otherwise)

Medium firm

This dummy variable refers to the firm size by number of employees (1 if a medium size firm and 0 otherwise)

Large firm

This dummy variable refers to the firm size by number of employees (1 if a large size firm and 0 otherwise)

Central (Reference group)

This dummy variable refers to the region of the firm is located (1 if in the Central region and 0 otherwise)

North

This dummy variable refers to the region of the firm is located (1 if in the North region and 0 otherwise)

South

This dummy variable refers to the region of the firm is located (1 if in the South region and 0 otherwise)

East Coast

This dummy variable refers to the region of the firm is located (1 if in the East coast region and 0 otherwise)

Sabah

This dummy variable refers to the region of the firm is located (1 if in the Sabah region and 0 otherwise)

Sarawak

This dummy variable refers to the region of the firm is located (1 if in the Sarawak region and 0 otherwise)

Export orientation

This variable corresponds to the firm’s orientation (1 if export orientation and 0 otherwise)

Foreign owned companies

This variable corresponds to the firm’s state of ownership (1 if foreign owned companies and 0 otherwise)

Overemployment

This variable corresponds to the level of employment (1 if firm is over-employing and 0 otherwise)

Sufficient employment (Reference group)

This variable corresponds to the level of employment (1 if firm is employing sufficint number of workers and 0 otherwise)

Underemployment

This variable corresponds to the level of employment (1 if firm is under-employing and 0 otherwise)