The aim of this paper is to construct an Augmented Dynamic Model of Job Creation for Malaysian Manufacturing Sector. The previous studies on job creation model focus on the static model where the job creation influenced by real wages, real output, assets, expenditure of research and development (R&D), lag of R&D, export and foreign labour. However, the aggregate rate of unemployment in Malaysia could not explain the dynamic of labour market. The dynamic of labour market can be explained more precisely through the formula of job flows (including job creation and job destruction). |
