Malaysia has successfully transitioned into an upper-middle-income economy, with sustained growth translating into higher incomes, improved living standards and stronger investments in social development.

Against this backdrop, Malaysia must simultaneously navigate a rapidly transitioning demographic: an increasingly aging population and a rapidly declining birth rate will gradually place pressure on labour supply, productivity, and economic competitiveness.

One of Malaysia’s most powerful yet underutilised economic resources lies in plain sight: women.

Women make up roughly half of the population, yet their participation in the labour force remains significantly lower than men.

According to the Department of Statistics Malaysia, female labour force participation hovers around 56.6 per cent, well-below that of men at 83.3 per cent. This gap is particularly striking because Malaysian women are more highly educated than ever before and often surpass men in tertiary education.

Opportunity And Support

The challenge therefore is not capability, but opportunity and support.

Malaysia must now harness the full potential of its human capital, particularly by encouraging greater women’s workforce participation.

At the most fundamental level, greater inclusion drives economic growth by increasing overall productivity.

On an individual level, women who have access to resources are better able to shield themselves from lifecycle risks and economic shocks.

Further data analysis reveals a stark contrast between male and female labour force participation rates over a lifecycle.

Malaysian labour force data reveals a “single-peak” pattern for women. Many begin their careers with strong momentum with participation reaching its height between ages 25 and 34, only to gradually leave the workforce over time.

In contrast, several advanced economies display a “double-peak” pattern, where participation falls during childbearing years but rebounds later as women re-enter employment.

Evidently, many women in Malaysia who leave the workforce do not return. Caregiving responsibilities appear to be a major factor.

In fact, the 2023 Labour Force Survey found that 63 per cent of women outside the labour force cited housework and caregiving obligations as the main reason for not working.

Women Primary Caregivers

In many households, women remain the primary caregivers for children, elderly parents and other family members.

Economists often refer to this dynamic as the “care penalty”. When societies rely heavily on unpaid care work, women inevitably become the default caregivers at the expense of their economic agency.

Without adequate are systems, women are compelled to navigate – and often choose between – productive and reproductive labour.

To be effective, the discourse on female labour force participation must evolve from recruitment strategies to long-term retention. Closing this gap is not only a matter of equality. It is also an economic imperative.

Greater participation of women in the workforce expands the labour pool, strengthens productivity and supports long term growth. But the benefits extend beyond that. Studies have shown that when more women work, families and communities flourish.

The evidence is clear: Women tend to reinvest up to 90 per cent of their earnings back in their children’s education and wellbeing. The impact of investing in women goes beyond individual; it is intergenerational.

Steps In The Right Direction

Encouragingly, Malaysia has begun taking steps in the right direction.

Under the Ekonomi MADANI framework, the government aims to raise female labour force participation to 60 per cent by 2030.

Recent policy changes under the Employment Act include longer maternity leave and provisions for flexible work arrangements reflect growing recognition that workplaces must adapt to modern family realities.

To strengthen the broader care ecosystem, the United Nations Development Programme (UNDP) partnered with the Ministry of Women, Family and Community Development last year to develop the Care Action Plan and Strategic Framework.

Building on this momentum, UNDP is now moving into the implementation phase, focusing on improving care-related data measurement and piloting community-based care models.

These initiatives are designed to reduce barriers that prevent women from fully participating in the workforce, enabling more balanced caregiving responsibilities and supporting sustainable career progression.

Sustaining progress will require commitment from policymakers, employers and society. With demographic shifts tightening the labour supply, unlocking women’s full economic potential is essential for Malaysia’s future growth.

Harnessing the skills and talent of half the nation could double the country’s possibilities.

-- BERNAMA

Aina Syazwani Salleh is the Gender and Safeguards Lead at UNDP Malaysia, Singapore & Brunei Darussalam.