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The Multidimensional Poverty Measure among Malaysian Employee Provident Fund (EPF) Retirees

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Abstract

Assessing poverty using multiple dimensions of deprivation provides a comprehensive picture of poverty. No one factor, like income or any monetary-based indicator is uniquely able to capture all of the factors that contribute to poverty. This study attempts to evaluate the multidimensional poverty measure among Malaysian Employee Provident Fund (EPF) retirees by using Alkire and Foster multidimensional poverty index to a set of deprivation dimensions. The findings indicate that around 84% of EPF retirees were identified as multidimensionally poor, meaning that they are in acute poverty. On average, poor retirees are deprived of 48% of weighted indicators. The results also show that women are more multidimensionally poor compared to men in terms of transportation, income, home ownership and education. The study discovered that Indian retirees are more deprived than other ethnic groups, followed by Malays. In this regard, it is necessary to strengthen current retirement savings institutions to reduce the impacts of the retirement crisis. The government needs to provide a Social Security system that rolls back the decline of Malaysian’s retirement savings.

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Notes

  1. Another social protection policy is Social Security Organization (SOCSO) that provides financial assistance to employees in cases of accidents or illness that would limit their ability to work.

  2. The main responsibility of the EPF is to assure that its members have enough financial security after their retirement. Distribution of EPF accounts by size is derived mainly from the distribution of earnings (Lee and Khalid 2014).

  3. In the first stage of participants’ selection, the phone interviews were done when the participant agreed to be in the study. Therefore, he/she answered to the socio-demographic characteristics, employment status, and income questions. Those participants were not able to answer the phone call questions, responded to the questions through email.

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Funding

This study funded by the Centre for Poverty and Development Studies, Faculty of Economics and Administration, University of Malaya under the grant No. PD007–2017.

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Authors and Affiliations

  1. Department of Economics, Faculty of Humanities, Arak University, Arak, 38156879, Iran

    Saeed Solaymani

  2. Pening Institute, George Town, Malaysia

    Negin Vaghefi

  3. Department of Economics, Faculty of Economics and Administration, University of Malaya, Kuala Lumpur, Malaysia

    Fatimah Kari

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  1. Saeed Solaymani
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  2. Negin Vaghefi
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Correspondence to Saeed Solaymani.

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The corresponding author of the manuscript entitled “The Multidimensional Poverty Measure among Malaysian Employee Provident Fund (EPF) Retirees” on behalf of all authors in the paper certifies that they have NO potential conflict of interest such as affiliations with or involvement in any organization or entity with any financial interest (such as honoraria; educational grants; participation in speakers’ bureaus; membership, employment, consultancies, stock ownership, or other equity interest; and expert testimony or patent-licensing arrangements), or non-financial interest (such as personal or professional relationships, affiliations, knowledge or beliefs) in the subject matter or materials discussed in this manuscript.

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Solaymani, S., Vaghefi, N. & Kari, F. The Multidimensional Poverty Measure among Malaysian Employee Provident Fund (EPF) Retirees. Applied Research Quality Life 14, 1353–1371 (2019). https://doi.org/10.1007/s11482-018-9658-4

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