Involvement of Aging Workers and Their Productivity in the Malaysias Labor Market

Chapter 1
1.0 Introduction
In the global context, many countries, especially those developed countries, such as USA, Japan,
and European countries, face the aging problems. Aging problems can cause many other social
issues, such as shortage of workers in labour market. The low rate of fertility is one of the main
reasons for aging problems in these countries. The low rate of fertility has caused decline in the
proportion of young people among the whole population for recent decades. Besides, as many
workers enter into the retirement age gradually, the shortage of workers now is becoming a social
issue in these aging counties. As time passes, more and more working population grow older and
face retirement. Aging workers issues are becoming problems for development and stability of a
society.
This research aims to understand the involvement and contribution of aging workers in the labor
market in Malaysia and analyze what factors that will influence their involvement. In this
chapter, the background of Malaysias economic and social development is presented to
understand the necessity of the research. The problem of the research theme is stated next.
Research questions and research objective make it clear what are we going to discuss in the
whole research. Then the following parts are the significance of the study, scope of study,
operational definitions as well as proposed chapters.
1.1 Research Background
As a developing country in South East Asia, Malaysia has developed in a fast pace, especially
after the World War II. Due to its rich natural resources and primary products, as well as the
advantage of the labor force, Malaysia stands out among South East Asia countries. Once
Malaysias development mainly depended on agricultural economy and exports of primary
products. However, in recent decades, Malaysia constantly adjust the industrial structure,
vigorously promote export oriented economy, such as the electronic industry, manufacturing,
construction and service industries developed rapidly. It has been transforming into a modern
industrial country in aspect of economy and society during the last three decades. Its economy
grew 6.7 per cent annum during 1971 to 1990 and currently is one of the fastest growing

economies in the world (C. Siwar & M. Y. Kasim, 1997). Now Malaysia has change it from the
reliance on agriculture and primary products into a high tech, knowledge based and capital
intensive industry driven export economy.
Malaysias rapid industrialization attributes to its openness to the early foreign direct investment.
The government encouraged foreign direct investment policy and accelerated Malaysias
prosperity. Nowadays, globalization and the need for Malaysia to advance its global
competitiveness have made it imperative for Malaysia to modify its previous paradigm of
economic development (J. A. Xavier & Z. U. Ahmad, 2012). To develop market oriented
economy, and the social and economic stability, and educated workforce, as well as technology
and equipment that link Malaysia to the world, not only assists the prosperity of enterprises in
Malaysia, but also to encourage them to become partners of government in national
development.
Malaysias rapid and sustained development in aspect of economy and society poses various
impacts on its labor markets. In recent years, the rapid development of secondary industry and
tertiary industry provides the nation and the people a broad employment market. The successful
rural urbanization also facilitate most of the labor force enter into the labor market, coupled with
the governments positive employment policies, as well as networks, magazines and newspapers,
employment agencies and other driving force, which all contributed to the formation of unified
labor market in Malaysia. Many groups of the population in Malaysia got higher level of income
which benefited from its prosperity during these decades. However, also because of its own
economic prosperity and development, its multi-ethical culture, as well as its geographic
advantage in Southeast Asia, which can provide large quantity of cheap labors, its labor market
appears to be complex. Due to uneven distribution of wealth and other social problems,
economic growth in Malaysia raised the earning of the young more than it did those of older
men; the more educated relative to those with less schooling; those in urban places relative to
rural residents (James P. Smith, 1990). In addition, due to Malaysias domestic labor shortage,
the government, in order to protect the interests of their labors, issued some policies to limit
foreign workers, leading the Malaysia labor market different degrees of deficiency in aspect of
supply and demand mechanism, competition, and human resource development. The Malaysian
government enforced the Work Regulation in 2010, in order to encourage latent workforce,

including aging worker, to go back to labour market. In 2011, Malaysian government approved
new National Policy for aging people. The new policy aims to empower the individuals, families
and community to provide friendly services to the older persons effectively and efficiently and to
ensure supportive environment for the well-being of the older persons (Ruhaini B. H. Zawawi,
2013). It pointed that aging people have made great contribution to the country. They have rights
to be respected and enjoy a comfortable life at their old age.
1.2 Problem Statement
As time pass by, many countries around the world face varying degrees of population aging
problems, including Malaysia. In modern times, societies are aging as a result of population
growth and medical and social progress (United Nations Population Division, 2001). In a global
context, sanitation work developed and made big progress during the past decades, such as the
emergence and development of human vaccines and antibiotics, and promotion of advanced
medical equipment, especially in those developing countries with more concentrated population.
The continuous use of these application successfully and undoubtedly extends the duration of
human life, resulting in the fast pace in human population growth. With the development of
society and the continuous economy of Malaysia in recent years, as well as the progress of the
social attitudes, Malaysias government makes effort to increase welfare and control diseases, in
addition to the common fertility decline in Malaysia, it cannot avoid the problem of aging
population.
The decline of fertility rate is along with the national development of economy and society. As
the growth of Malaysias economy in recent decades, peoples perception changes. Women,
especially those have higher education and higher capability in workplace, are more willing to
make a career than give birth to babies. This results in the decline of the fertility in the long run.
And the decline of the fertility rate is a main cause of aging problem. Besides that, since
Malaysia is a developing country, it also face brain drain issue, which is the large-scale
movement of educated and skilled workers from developing to developed countries (A. Ibraheem
& C. Devine, 2013). This leads the countries to loss more human resources. Moreover, Malaysia
is a Southeast Asian country, where have plenty of cheap labours. Because Malaysias
development is better than other Southeast Asian counties, it attracts a great many skills and

professional foreign workers immigrate to this country. These reality aggravate the problems
associated aging workers in Malaysia.
Since the support to aging people and fostering young generation require different social
resources, the burden borne by society and government are also different. Although the decline
of the fertility in Malaysia offset the increasing proportion of elderly population, and the total
population that depend on the government and social support will not increase largely in a fairly
long period, the cost of social spending will continue to grow steadily. Medical expenses and
social pension are the main items of expenditure for the aging people. Aging people will be a big
social burden especially when they are retired. In January 2012, the Prime Minister of Malaysia
agreed to the demand made by the Malaysia Congress of Unions of Employees in the Public and
Civil Service to extend the retirement age from 58 to 60 (Junaidah Hashim & Saodah Wok,
2013). Retirees are not equal to those who lose the ability to work, in fact, some of these aging
people still can make a contribution to the society. Since retirement, aging people have to leave
their working post to younger employees, and rely on retirement pension. Thus, on this occasion,
idle aging workforce will be a waste of social resource. However, to do the research that whether
aging people get an opportunity to go back to work and the involvement and their productivity in
the labor market, we need to consider some factors that influence the situation. In this research,
we choose social prejudice, number of aging people who are willing to work after retirement,
their health and life expectancy and their education level as independent variables to analyze the
influence of aging peoples involvement and productivity in Malaysias labor market.
In order to maintain the stability of society and improve the life quality of aging people,
Malaysian government and some social organization have taken some measures and made
programs to provide physical support for them, especially those retirees. However, in society,
there still exists age discrimination and bias against older people. Older workers are perceived to
lack an orientation towards flexibility, innovativeness, and change (Kidwell, 2003), and they are
considered to be less energetic in and motivated about their jobs (Kroll, 2003). Some people even
have subjective malicious discrimination to aging people. They consider old people are out of
date, and useless for family and society. Elder people indeed are physically not as good as young
people, but they have accumulated enough social experience and life intelligence, which can be
valuable resource of social development.

Whether the aging people themselves want to work after retirement is also a factor that may
influence the involvement of aging people in labor market. Some aging people may be not
willing to work anymore after retirement. They may consider that they are too old to do
physically jobs, or they have struggled for decades to make ends meet and support the family, it
is time for them to take a break and be supported by their children. Some reality issues can
decrease aging peoples intention to work, such as the change of times, and increasing fierce
competition. New opportunities for working or learning are not often available to functional
older adults (H. Sabelli, M. Patel, L. Carlson-Sabelli, J. Konecki, J. Nagib & A. Sugerman,
2003). Aging people may feel that they catch up with the changes in technology or knowledge,
and thus cannot be competent for some jobs.
As people get older, their body functions gradually degenerate, and people even have to face
many health problems and disease. Therefore, health becomes a main concern for aging people
in both their life and work. Health status significantly relate to employees decision to continue
working in an organization (Feldman, 1994). Even though these aging employees want to work,
they had to consider their health condition. Some organizations may let their employee retire
early because of their unhealthy status. Thus, it is considered that health is a very important
factor that impact aging peoples involvement in their work.
In this research, education level is also chosen as a factor that will influence aging peoples
decision and involvement in the labor market after retirement. It would reduce the knowledge
gap in performance management of older worker especially in higher education sector (H.
Junaidah & W. Saodah, 2013). Even though those people get older and their body functions
degenerate, they still master abundant professional knowledge. With these knowledge, aging
people still can make a contribution and create value for the society. In recent decades,
Malaysian government has been committing itself to establish a better education system and
cultivate high quality talents. This facilitates the formation of human resource market, which is
believed to affect the re-employment of people after retirement in this research.
1.3 Research Question
To better understand the topic and make the research direction clearly, four questions about the
relationship between those independent variables and dependent variable are listed below:

1. How does age discrimination or prejudice will affect aging peoples involvement and
productivity in the labor market in Malaysia?
2. Is there any relationship between the number of aging people who are willing to work after
retirement and Malaysias labor market?
3. How health status influence aging peoples involvement in the labor market in Malaysia?
4. To what extent does education level of aging people affect their contribution to the labor
market in Malaysia?
1.4 Research Objective
In this research, we will achieve four objectives:
1. To find the relationship between age discrimination and aging peoples involvement in
Malaysias labor market.
2. To identify the influence of the aging peoples willingness to work after retirement and their
involvement in the labor market.
3. To learn how the health status of aging people will affect their involvement in Malaysia.
4. To analyze the impact of aging peoples education level on their involvement and productivity
in the labor market.
1.5 Significance of the Study
This research aims to study the aging population and their involvement and productivity in the
labor market in Malaysia. Aged tendency of population has become a social issue in many
countries. Malaysia also need to face this problem in the near future, for the aging population is
temporary not quite a big problem in Malaysia. However, for the long term development of the
nation and the stability of the society, it is necessary for the government and social organizations
to understand the issue, especially for the policy makers to formulate related regulations to settle
the problem. For government and related organizations, it is their responsibility to make policies
to give some support to aging people. If some of the aging people who can still work after
retirement can make a contribution to the society, it will be a sort of valuable resource for the
nation.

Age discrimination is a bias among people in the society. It can cause some social problems,
even harms to aging people. Aging people are vulnerable group of people in the society. They
make contribution to the society when they were young, but now they need care and support in
return. Age discrimination or prejudice can cause inequity in society, such as old people are
treated unequally in workplace and are not respected or concerned, which does no good to the
stability or prosperity of society.
Aging people who are willing to continue work after retirement can be an important variable for
us to study the aging people issue and do the research. The willingness to work can be a
determinant for aging people to continue work after retirement. This factor helps us get a
knowledge of those aging people about their intention and thoughts. Therefore, it is significant
for us to infer their involvement in the labor market.
Health status is an important factor to influence aging peoples involvement and productivity in
the labor market. It is not only an individual problem of old people themselves, but also a social
concern for government and other related organization. Health status of aging people, and also
their life expectancy are indicators of a societys development. It is the government and related
organizations responsibility to build an integrated medical system, providing better medical
environment for its people. Therefore, it is necessary for those governmental organizations to
understand the holistic health status of aging people, in order to take measures to settle issues
related to aging people.
It is considered in this research that education level of aging people can be a determinant that
influence their involvement and productivity in the labor market, especially their decision to go
back to workplace after retirement. An aged well-educated person has integrated knowledge in
his area of expertise. Besides that, this kind of people usually have open mind on their own life
experience and social value. Even though their physical strength is not good as young people,
their experience and knowledge can still create value for the society. Therefore, education level
is considered significant to study the involvement of aging people in the labor market.
1.6 Scope of the Study
The respondents of this research will be older people who aged from 55 to 60. These respondents
will be chosen in the education and medical industries. Because these two industries need more

high educated employees, and these organizations are more probable to re-employ those retirees,
for these employees have higher education level and much more experience in work. The survey
will be conducted within some universities and hospitals in Kuala Lumpur. Because Kuala
Lumpur is the capital and the most developed city in Malaysia. Here gathers many high-educated
and skilled workers from the whole country and foreign workers. Some social problems relating
to aging population and the competition in labour market are more significant than other cities in
Malaysia.
1.7 Operational Definition
Aging Worker

Individuals who are in senior staff or management positions, whose

retirement represents a tremendous loss of institutional memory and
knowledge of proprietary practices (Francine M. Tishman, Sara Van Looy

Age

& Susanne M. Bruyere, 2012).

The rejection of an older worker because of assumptions about the effect of

Discrimination

age on the workers ability to perform, regardless of whether there was any

Retirement

factual basis for the assumptions (M. Sargeant, 2004).

A part of a company personnel policy or collective agreement that says that
a particular contractual arrangement is over, and the individual has to retire
from the organization, usually with the receipt of a company-sponsored

Health

pension (R. Gomez, M. Gunderson & A. Luchak, 2002)

A very broad concept, which includes mild and moderate mental health

Education

issues as well as disability (V. Beck & M. Quinn, 2012)

Education is designed to provide specified learning opportunities and is
institutionalized, ether as state institutions or as corporate ones (Bolanle A.
Olaniran & Mary F. Agnello, 2008).

1.8 Proposed Chapters

Chapter 2
2.0 Introduction
In order to do the research on the social issue, aging workers involvement and contribution in
the labor market in Malaysia, we need to take a close look at the aging worker, and the factors

will affect their activities and involvement in the labor market. In this research, we choose aging
workers as dependent variable, and age discrimination, aging workers willingness to work after
retirement, health status and education level as independent variables. Thus, in this chapter, we
will define the topic and those factors influencing it. The literature gap compared with other
researches, framework of the topic, as well as research hypothesis will also be presented in this
chapter.
2.1 Define Topic
Aging of population has become a social trend in recent decades and future in developed as well
as developing countries. Developed countries, such as European countries, has faced this issue
for longer time and more severe than those developing countries. Even though Malaysia doesnt
have quite severe problem about aging of population now, it will face the issue as it develops
sooner or later. Therefore, it is necessary for it to draw lesson from developed countries and
study the issue of aging population.
Older workers in an organization may carry valuable company-specific knowledge and act as the
companys institutional memory (Asmund Hermansen & Tove Midtsundstad, 2015). They are
individuals who are in senior staff or management positions, whose retirement represents a
tremendous loss of institutional memory and knowledge of proprietary practices (Francine M.
Tishman, Sara Van Looy & Susanne M. Bruyere, 2012).They can be categorized in different
ways, such as 65 as the internationally adopted maker used by the United Nations, or 60 65 as
the statutory retirement age in different countries (Luo Lu, 2012). Basically, the aging workforce
will face decreases in muscular strength (Kathy O. Roper, & Daniel C. Yeh, 2007), and their
physical capabilities will diminish at this age. However, due to the reality in a developing
economy, it still needs older people to continue working, even after retirement. Therefore,
different views and opinions on aging of population exist among society and researchers. H.
Sabelli, M. Patel, L. Carlson-Sabelli, J. Konechi, J. Nagib and A. sugerman (2003) expressed
about aging in their research that aging is accelerated by social norms and their psychological
introjection, and it is more than an individual biological process. Aging is also demonstrated as
social phenomena constituted by a set of social relations highlighting important cultural
dimensions of status and playing out as a master narrative of less than (Fearing age, 2014).
While in Francis Cheung and Anise M.S Wus research (2013), they discussed successful aging

and defined it as a multi-dimensional construct involving social, psychological, and physical

factors. They also suggested that successful aging should not just be evaluated from a general
perspective, but be mainly defined in its related domain, such as work domain. Some literature
discussed about older workers qualities and characteristics. They are considered as the main
holders of positive qualities such as loyalty and reliability, but when compared to younger
worker, as less healthy, less flexible and less available for training (Andrea Principi, Paolo
Fabbiettie & Giovanni Lamura, 2015). Older workers do face some reality in workplace. They
would have greater difficulty performing tasks that require retention of large amounts of
information or that require rapid cognitive processing (Maria C.W. Peeters & Hetty van
Emmerik, 2008). Generally, older employees physical capacity will decrease over time, but
social and mental skills, such as feelings of responsibility, leadership, conscientiousness and
creativity are increasing (D. Buyens, H. V. Dijk, T. Dewilde & Ans De Vos, 2009). So it is
possible for them to continue to get involved in and make contribution to the labor market.
In these literatures studying about aging people, or older workers, some of them talks about
retention measures of companies to retain older employees (Asmund Hermansen & Tove
Midtsundstad, 2015); some talks about the relationship between aging and social systems (H.
Sabelli, etc. 2003). In F. Cheung and Anise M.S. Wus research (2013), successful aging and
older workers intention to stay are discussed. There are also some research concerns the wellbeing of older workers (Maria C.W. Peeters & H. V. Emmerik, 2008). But there is no research
study on the aging workers involvement in the labor market, or the factors affecting this
dependent variable.
2.2 Define Elements of the Framework
To study the involvement of aging workers and their productivity in Malaysias labor market,
four independent variables that may influence the dependent variable in this topic will be defined
in this part, as well as some literature review of other related researches.
2.2.1 Age Discrimination
Age discrimination is also a social problem, and has negative impact on older workers in
workplace. Any differential treatment on the basis that an employee is old is considered age
discrimination (J. B. James, S. McKechnie, J. Swanberg & E. Besen, 2013). It is defined as the

rejection of an older worker because of assumptions about the effect of age on the workers
ability to perform, regardless of whether there was any factual basis for the assumptions (M.
Sargeant, 2004). Pinal Shah and Brian Kleiner (2005) pointed in their research that age
discrimination in the workplace occurs when one employee is treated differently from another
due to age. Age discrimination is also defined as any prejudice or discrimination against or in
favor of an age group (E. Parry & S. Tyson, 2009). It is a violation of the principle of equal
treatment, indicating a situation where one person is treated less favorably than another in a
comparable situation (M. Nygard & F. Snellman, 2014). Actually, people with age discrimination
not only have bias on older people, but also on those young employees, for their less work
experience, but older people may suffer more. Older employees are confronted with the stress of
age discrimination (T. Rabl, 2010). Many companies have biases toward older workers and
conceive the stereotypical image of older worker as less flexible, less motivated, and less
innovative than those younger counterparts (B. Peng & B. H. Kleiner, 1999). Those employers
consider that older employees are less productive, and it will cost much more to retrain those
older employees, because in old age, people can be hard to accept new things and new
technology. The problem with age discrimination can be very subtle (R. Ray & B. H. Kleiner,
2001). When an employer has age discrimination towards older employees, he may make tricks
that make older employees leave without showing his real purpose. Older employees who are
being discriminated may face more limitation, such as promotion and less rewards. It even be
hard to recognize from surface, because employers will have an excuse that they didnt do their
job well than those young. In order to protect those older employees interest from manager or
employers age discrimination, Age Discrimination in Employment Act (ADEA) came up with
some regulation, to prohibit age discrimination in the hiring , discharge, promotion, or treatment
of persons over the age of 40 (Gene G. Y. Shen & Brian H. Kleiner, 2001). And some legislation
on age discrimination also prohibit unjustified direct and indirect age discrimination and all
harassment and victimization on grounds of age, of people of any age, young or old in the areas
of employment and vocational training (E. Martin & K Gardiner, 2007).
Malcolm Sargeant (2004) studied about age discrimination and the impact of the age
discrimination regulation on the contractual retirement age. Jacquelyn Boone James, etc. (2013)
divided age discrimination into intentional and unintentional, and study their impact on
workplace. Tanja Rabl (2010) examined how age, perceived age discrimination and perceived

organization support relate to each other and affect performance of employees. There are also
many research study age discrimination in many aspects. In this research, we will study age
discrimination as one of the factors influencing older workers involvement in labor market.
2.2.2 Aging Workers Intention to Work after Retirement
In this research, aging workers intention to work is assumed as an independent variable to have
influence on their decision of involvement in the labor market. Older workers decision to work
or not does matters to the issue. To demonstrate this variable, we also need to have a look at the
fact of retirement that relates to aging people. As we mentioned before, older peoples physical
condition will diminish, resulting in low productivity. As their age increases, work gradually
becomes heavier for them and retirement is more desirable (A. L. Gustman &T. L. Steinmeier,
2014). Considering social equity and welfare to aging people, governments will regulate the
retirement age of older employees in their countries. The mandatory retirement, at some point,
forces numerous capable employees to terminate their working career involuntarily, which is
considered to serve as a constraint on those employees. Basically, retirement is a part of a
company personnel policy or collective agreement that says that a particular contractual
arrangement is over, and the individual has to retire from the organization, usually with the
receipt of a company-sponsored pension (R. Gomez, M. Gunderson & A. Luchak, 2002). In
recent decades, under employment pressure, organizational and labor-market problems have
often been solved by encouraging employees to retire before their statutory age (S. Zappala, M.
Depolo, F. Fraccaroli, D. Guglielmi & G. Sarchielli, 2008). From this, we can see that retirement
is not only the personal issue, but also a matter of social concern. The clash between individuals
and organization or society indicates that, retirement is a flashpoint in the continuing interplay
between the rights and responsibilities of the individual and the collective and competing
philosophies for organizing economies and society (T. McManus, J. Anderberg & H. Lazarus,
2007). Some older employees choose to retire, because retirement offer older workers the
opportunity to escape unsatisfying situations at work (K. Henkens & M. Leenders, 2010). But
some older people may have high intention to work after retirement, for work is considered by
them to be of relatively high importance when compared with meaning in other areas in a
persons life (K. Shacklock & Y. Brunetto, 2011). They value work as a significant thing in their

life, and like to work despite they dont need to earn enough money to maintain the quality of
life.
People take action due to some motivation, or intention we use in this research, which is defined
as the contemporary influence on direction, vigor and persistence of action (D. Kooij, A. D.
Lange, P. Jansen & J. Dikkers, 2008). Luo Lu (2012) define behavioral intention as the
willingness of older adults to continue working in older age. Andrew Templer, Marjorie
Armstrong-Stassen and Julian Cattaneo (2010) focused on three specific motives that are
important in affecting aging workers decision to continue to work: financial necessity, work
fulfillment and generativity. The financial factor, or the need of money to maintain life quality, is
the first important reason for older workers continuous work. The work fulfillment motive
captures the sense of work fulfillment that older worker derive from working and includes such
reasons as enjoyment of work and sense of achievement they get from work (A.Templer, etc.
2010). The generativity reason has the relationship with young generation. Besides, because of
social attitude towards older workers, some of them may increase their commitment to their
career to contradict the stereotype of age-related decline in motivation at work (D. Desmette &
M. Gaillard, 2008).
These researches mentioned above study or discuss about older workers motivation or intention
in working and retirement from different aspects. In their research, the influence of the older
workers intention to work after retirement on their involvement and productivity are not
discussed further. Mostly, older workers intention are studied as a dependent variable. So in this
research, we will study older workers intention to work as an independent variable to aging
workers involvement and productivity in labor market.
2.2.3 Health Status
Health is the main concern for aging people. It not only affect the quality of aging peoples life,
but also their productivity in working. Health is a very broad concept, which includes mild and
moderate mental health issues as well as disability (V. Beck & M. Quinn, 2012). While health
status is described as a multi-dimensional and unobservable individual quality (K. Bolin, M.
Eklof, S. Hojgard & B. Lindgren, 2015). Basically, working and health have mutual effect on
each other. On one hand, some work can cause people health problems due to the environment
people work in, or the characteristics of the work. Especially jobs that require employees to

perform physically demanding activities for long periods at a time will cause physical health
problems for older employees (M. Peeters, & H. V. Emmerik, 2008). On the other hand, health is
considered to have much influence on peoples work productivity, and even their decision to quit
or continue working. The impact of age on health is unfavorable to employment, potentially
limiting the type of job or work and older worker can do, as well as how well they can do it and
possibly influencing employers attitude to their employability (F. Carmichael, C. Hulme & L.
Porcellato, 2013). When an employee is in poor health condition, he is considered to be more
likely to absent from workplace and less efficiently in work. This may result in reduction in their
wages and rewards, which in return reduce employees motivation in work, and in long run, will
have a bad impact on their employability. Decline in health status may reduce the probability of
continued work for three reasons: poor health may raise the disutility of work; reduction of
return from work via lower wages and by entitling individuals to non-wage income; through
disability benefits, poor health may act as an incentive to exit the labour market (E. Zucchelli, A.
Harris, A. M. Jones & N. Rice, 2007). Some research found that poor health increases the hazard
rate of exit from full-time employment to non-employment by a factor of 2.5 and reduces the
entry rate from non-employment to part-time and full-time employment by 57% and 72%
respectively (D. M. Blau & D. B. Gilleskie, 2015). Due to poor health statue, many older
employees decide to retire early. Health problems can decrease labor productivity and weaken
the position of older workers in employment (B. Legendre & M. Sabatier, 2014). As for
employers, they also need to consider older employees health status, and decide whether require
them to retire early before retirement age. This is concern for the less productivity and less return
of older employees. However, in fact, to exclude workers in poorer health or to make a selection
in terms of jobs tend to minimize the influence of quality of work on the health of older workers
(T. Debrand & P. Lengagne, 2008). Although working becomes less valuable because of lower
pay, there may still be incentives for people in poor health to work as they will preserve their
health care benefits in that case (N. G. Vaillant & F. C. Wolff, 2012). Some research studied
healthy worker effect, which arises if older workers still in the labour market have better
underlying health than those who leave employment (M. K. Jones, P. L. Latreille, P. J. Sloane &
A. V. Staneva, 2011).
Most of these literatures stated above mainly discuss about the relationship between health status
of older employees and retirement, as well as the effect of employees health status on

employment. But in this research, we are going to study the impact of health status of older
workers as an independent variable of their involvement and productivity after their retirement in
labor market in Malaysia.
2.2.4 Education Level
Education level is an important factor of workers employability when they look for a job.
Education is designed to provide specified learning opportunities and is institutionalized, ether as
state institutions or as corporate ones (Bolanle A. Olaniran & Mary F. Agnello, 2008). Education
level is determined by education length, which is the minimal time required to obtain a diploma
and constructed from the highest education level achieved (S. Weber, 2014). In Malaysia, the
government has been establishing an integrated education system for recent decades, however, as
for older people, most of them were not well educated or reach higher education decades ago.
Older workers most likely to be unemployed are those with the least education and training (Carl
E. Van Horn, Kathy Krepcio, and Maria Heidkamp, 2015). Some job may be difficult for older
workers to take. Those occupations that are increasingly available in the labour market are those
associated with professional and paraprofessional work, which normally have high educational
requirements for entry (Bailey, 1993). As time passed, the education certification which was
available for a person to look for a good job decades ago, now is not enough. Many older
workers face more difficulty to get an entry qualification for a good job. Nowadays, as
technology advance and various jobs and work appear in the labour market, education institution
and society have to cultivate more and more well-educated people. Some work may require an
employee attain many different skills and ability to fulfill a job. Thus, many people have the
view that a low level of educational attainment may be an indicator of low capabilities (Spence,
1973). Those less educated workers have to invest more in technology specific skills, however,
which will therefore suffer higher rates of human capital depreciation due to technological
improvement (Gould, 2001). Nevertheless, higher levels of education give workers more
employment options and make them more loyal to their profession (Elliman & Hayman, 1999),
which is difficult for them to change their profession because they have invest in so much time
and energy to achieve the higher education level and related profession. There is evidence in
other research that those who have a tertiary educational level are less likely to leave work
(Eurofound, 2012). Moreover, according to L. Lebedinski & V. Vandenberghe (2014), marginal

productivity of workers with a tertiary education is positively associated with firm-level overall
labour productivity. Employees who have higher education level will attain knowledge, skills
and work experience are high efficiency in work and have high efficacy to achieve new tasks.
Their high education constitutes a higher value of human capital by bringing both a greater
extent of general knowledge and also more advanced problem solving skills that come with
educational development (Shuhong Wang, Steven D. Caldwell & Xiang Yi, 2015).
The literature referred above studied the contribution of education in the employees productivity
in firm (L. Lebedinski & V. Vandenberghe, 2014), how employees attributes and education
involves in working to human capital practices in company (Shuhong Wang, etc. 2015). Some
literature studied the relationship between education level and job satisfaction (Elsy Verhofstadt,
Hans De Witte & Eddy Omey, 2007). But none of those literatures studied about the older
workers education level and their involvement in labour market after retirement. There exists
literature gap of the topic that will be studied in this research.
2.3 Literature Gap
There are many former studies and researches on the aging population and related issues. But the
direction of these studies are quite different. H. Sabelli et al (2003) mainly studied the
relationship between the aging and social system, and talked about healthy aging. They claimed
that in order to promote healthy aging, there needs the changes in peoples perception and
behavior, as well as social norms and beliefs. Francis Cheung and Anise M.S. Wu (2013) studied
the relationship amongst the older workers successful aging, job satisfaction and their intention
to continue working in organization. Besides, peoples attitudes of aging and its impact on older
workers intention to continue working are studied in Luo Lus research (2012). Some other
researches also studied the well-being of older workers (M. Peeters & H. Emmerik, 2008) and
some stereotypical view of aging people in workplaces (D. Buyens, et al. 2009). However, there
still exists literature gap to study factors influencing aging workers involvement in workplace
after retirement.
There are also literatures studying age discrimination, older workers intention to work, health
status of older workers and education level, which we choose as independent variables in our
research. Age discrimination contains intentional and unintentional (J. B. James, et al. 2013),
which have different impact on objective people. Age discrimination not only have impact on

older people, but also young people. But older employees are affected more strongly than those
young workers (T. Rabl, 2010). Age discrimination do cause much inequity in job opportunity
(G. Shen & B. Kleiner, 2001). Some research studied the factors affect older workers intention
to work, including financial motives, work fulfillment and generativity motives (J. Cattaneo,
2010), and older workers intention to retire due to burnout (K. Henkens & M. Leenders, 2010).
Besides, health status is studied as a main concern for older workers, whether to retire or
continue working, which affects the ability of older workers to stay in the labour force (A.
Walker, 2015), and the effect of health on the older workers behavior in workplace (D. Blau &
D. Gilleskie, 2015). Moreover, education is studied by some research to find out its relation with
the labour productivity and individuals earning (L. Lebedinski & V. Vandenberghe, 2014). It
claims that older workers may suffer labour market disadvantage due to the lower education
level (K. Mayhew & B. Rijkers, 2004).
Although many literatures study about aging issue, there is no researches study about aging
workers involvement in labour market after retirement and any factors affecting this dependent
variable. In this research, this topic will be studied, and age discrimination, older workers
intention to work, health status of older workers and education level are studied mainly as
independent variables.
2.4 Proposed Framework

IV1: Age
discrimination
IV2: Older
workers'
intention to
work
IV3: Health
status

DV: Aging workers'

involvement in labor
market after retirement

IV4: Education
level
The proposed framework diagram presented above describes the dependent variables and the
independent variables in this research. Aging workers involvement in labour market after
retirement is set as the dependent variable, and age discrimination, older workers intention to
work, health status and education level are independent variables.
2.5 Research Hypothesis
In order to make the purpose of this research clear and find the relationship between these
independent variables and dependent variables, four hypothesis are come up below to infer there
exists positive relationship between the factors and aging workers involvement in labour market,
according to the framework presented above.
H1. There is positive relation between age discrimination and aging workers involvement in
labour market.
H2. Older workers intention has positive relation to influence their involvement in labour
market.
H3. Health status has a positive impact on aging workers involvement in labour market.
H4. There exists positive relation between education level and aging workers involvement in
labour market.

2.6 Conclusion
In this chapter, many previous researches are cited to explain the aging population, age
discrimination, older workers intention, health status and education level, which we set as
dependent variable and independent variables respectively. Although there are plenty of
researches studied those variables from different aspect, there still lack study of factors
influencing aging workers involvement in labour market especially after retirement. Therefore,
literature gap is included in this chapter. Hypothesis are listed in order to help us do the
following research. In the following chapter, the research methods and approaches are discussed
to complete the research.
Chapter 3
3.1 Introduction
This chapter presents the research methods used in the study, where street survey is main
methods used to collect data. In this chapter, research instrument, pilot study, research design,
and research approach are included to elaborate on the methodological details of the study.
3.2 Research Instrument
Research instrument is a kind of professional technique or tool for researchers to collect,
process and interpret the information that the data conveys. In this research, Cronbach alpha
value will be applied to examine the reliability of data.
3.3 Pilot Study
Pilot study will be conducted prior to the data collection. It is the part that is considered
as a small experiment or rehearsal before the whole research. The purpose of the pilot study is to
make sure that the instructions and content of the questionnaire are clear and understandable by
the respondents, also to test the reliability and validity of the research approach. After the pilot
test, Cronbachs Alpha value will be applied to test the reliability of the pilot test. Some
questions will be asked and respond will be collected through street survey. Those opinions from
respondents will be referred to in the research. Amendment will be made to the questionnaires
according to the suggestions from respondents.
3.4 Research Design

Research design in the next part will demonstrate how to decide the sample size, target
population and sample technique in the research.

3.4.1 Sample Size

To determine the sample size for this study, a general rules by Hair, Black, Bablin,
Anderson, and Tatham (2006) will be used. According Hair et al. (2006), a minimum of 20 cases
needed for each variable. So, a total number of 100 samples, which is the product of 5
dimensions multiplied by 20 cases, will be satisfactory number of the sample size of the present
study. In order to get more respondents, 150 questionnaires will be distributed.
3.4.2 Target Population
The targeted population of this research are older workers in education and medical
industries who aged 55 to 60. The older employees of a few universities and hospitals in Kuala
Lumpur will be chosen in this research to conduct survey. The survey will be conducted in the
form of questionnaires. They will be asked to answer questions about their involvement in the
labour market and their opinions about aging problems.
3.4.3 Sampling Technique
Sampling is a fundamental operation for the auditing and statistical analysis of large data
base (Oklen & Rotem, 1986). Sampling is very basic but important technique aiming to select
some sample of population to estimate the population at low cost. The purpose of the sampling is
to estimate and infer the features of the whole population through the analysis of the sample
units. There are many other types of sampling methods, such as random sampling, cluster
sampling, typical sampling, as well as systematic sampling. In this study we will apply Simple
Random Sampling, which is a basic type of sampling, to survey the population of each part that
has been drawn equally. This method is regarded as the building block for more complex
sampling methods.
3.5 Research Approach

In this part, some research approaches will be introduced, including descriptive analysis,
reliability test, normality test, linearity test, correlation analysis and multiple regression analysis.
3.5.1 Descriptive Analysis
Descriptive analysis is common used in the project research. It refers to the investigation
of different aspects of status quo with different factors. The acquisition and recording of data
mainly focuses on the description of objective facts. Descriptive analysis describes and
summarizes the essential features of the data that has been found from the respondents (Aaker,
Kumar, & Day, 2007). It also includes the description of basic characteristics of data, such as
mean and median, the tendency of data features, and other demographic segments to deliver
information of data in research. Frequency is one of the measures of descriptive analysis. It
refers to the number of times that a variable value representing a certain characteristic of data,
appears in the group of data. In a set of measurement based on the size of order, the number of
measured values within each group is the frequency. Frequency can produce frequency, the latter
one is actually the percentage of frequency and total values. Thus, it is a very important measure
to process the data from survey and express the information the data conveys.
3.5.2 Reliability Test
Reliability test aims to understand, evaluate, analyze and improve the reliability of data.
It is an important measure to test the standardization of variables, based on which the reliability
will be decide in the research. The reliability test will be assessed and applied as a test method in
the research. As a simple instrument, reliability test can be applied in other measurement devices
easily. It also tests whether the individual items are significant or not in the whole research.
According to Nunnally (1981), Cronbach alpha value should exceed 0.7 to prove the variables
used in the questionnaire is reliable. So, in this research, Cronbach alpha value should be same or
more than 0.7 in order to indicate whether there is a good result of the collected data and to
decide the reliability of the scale items tested, and then to continue the overall research.
3.5.3 Normality Test
Normal test is one of the most important kind of methods to analyze the distribution of
data. It aims to generate a normal probability plot and test the hypothesis, in order to check
whether the observed value is normally distributed. The histogram of residuals and normal
probability plot (p-p plot) were used to test the normality of the error term assumption (Hair et

al., 1998). The histogram of residuals showing a bell-shaped represents a normal distribution
(Hair et al., 1998). Besides, the residuals in the p-p plot that fall closely along the diagonal line
indicates the normality of the data (Hair et al., 1998). In the statistical analysis, researchers are
more willing to make normality hypothesis, however, whether the hypothesis feasible or not,
normality test will be involved in subsequent research.
3.5.4 Linearity Test
If these exists a linear function relation between the two variables, we can consider that
they have linear relationship. It shows that when the two variables are regarded as points of
horizontal and vertical coordinates respectively, and connecting these points and their image is a
straight line on the flat surface. Thus, the linearity test is to validate the assumption of linearity,
and partial regression plot is used to examine the relationship of a single independent variable to
the dependent variable (Hair et al., 1998). The randomized pattern of the scatter plot indicates
that the linearity assumption is met (Hair et al., 1998). Besides, the linear relationship exists
between two variables if they can be expressed in a linear equation.
3.5.5 Correlation Analysis
Correlation analysis aims to research whether there exists a certain dependency
relationship between the two variables. Based on this dependency relation, researchers need to
study the direction of their relation as well as the degree of the correlation. This is a statistical
method to study the correlation of the random variables. Positive (+) or negative (-) signs used in
the analysis refers to the direction of the relation. According to Hair et al. (2010), Sekaran
(2006), the correlation value in the range of -1.0 and +1.0, -1.0 which means perfect negative or
the negative relationship and 0.0 denotes no relationship. While +1.0 means perfect positive or
the positive relationship. In this study, bivariate correlation method of Pearson's Correlation will
be applied to determine the relationship between the dependent variable and independent
variables.
Table 3.2: Interpretation of Correlation Indices
Correlation Indices Size

Interpretation

< 0.20
0.2 0.4
0.4 0.6
0.6 0.8
0.8 1.0

Very Low Correlation

Low Correlation
Moderate Correlation
High Correlation
Very High Correlation

Sources: Guildford (2006)

3.5.6 Multiple Regression Analysis
Regression analysis is a statistical analysis method to determine the interdependent
quantitative relationship between two or more than two variables. It based on the observation of
data to establish the appropriate dependent relationship between variables to analyze the inherent
rule of data. It is often used to predict or control issues. In the regression analysis, correlation
coefficient r shows strength between two variables, but it cant explain the difference in the
dependent variable when the dependent variable has been theorized to influence it at the same
time (Sekaran, 2003). When the variables jointly regressed on the dependent variable for the
purpose of explaining the differences among the individual correlation would fall to the multiple
correlation. In the regression analysis, if there are two or more independent variables, it is called
multiple regression. Multiple regression analysis is often used in the research to analyze
significant relation between the dependent variable and the independent variables.
3.6 Conclusion
In this part of the research, some research methodologies are introduced, including
research instrument, pilot study, research design as well as research approach. Cronbach alpha
value is introduced and will be used in the analysis of data collected through survey. The choice
of target population and sampling technique are discussed in order to make the process of survey
clearly. This research is a correlation study, which aims to study the relation between those
individual variables and dependent variable.