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A recent study has found that the education pay gap in Malaysia has narrowed over the past decade
The study by PNB Research Institute revealed that entry-level workers with lower academic qualifications — particularly PMR and SPM holders — saw significantly higher real wage growth after the introduction of Malaysia's minimum wage policy in 2012.
While university graduates continue to earn more overall, the wage growth for degree holders has been relatively modest in comparison, leading to a sharp decline in the financial advantage typically associated with higher education.
Entry-level workers with secondary school qualifications are enjoying a higher salary increase compared to university grads
Image via Permodalan Nasional Berhad
Between 2012 and 2022, PMR graduates saw their median monthly salaries rise by 64%, while SPM holders enjoyed a 37% increase in real wage growth. In contrast, university degree holders saw only a 5% increase in the same period.
Those with Master's degrees fared even worse; their real wage growth dropped from 4% to -10%.
As a result, the wage premium of a degree over an SPM certificate has steadily declined: from 167% in 1997 to 128% in 2012, and down to just 67% in 2022.
Image via Permodalan Nasional Berhad
While vocational grads are catching up in terms of pay, they still trail behind those with university qualifications
Image via Permodalan Nasional Berhad
The study also found that although individuals with vocational (TVET) qualifications saw their starting salaries grow faster in real terms compared to those with traditional academic qualifications, they still earned less overall.
From 2012 to 2022, academic bachelor's degree holders consistently earned around 1.4 times more than those with a TVET technical institute certificate.
Similarly, academic diploma graduates out-earned TVET diploma (DKM Level 4) holders by a margin of about 1.1 times throughout the decade.
