Analysis on the relationship between tourist arrival and unemployment in Malaysia

Abstract

The tourism industry has an important role in the Malaysian economy as one of the income sources; to create job opportunities and reduce the unemployment rate within the country. The main objective of this research is to investigate the relationship between tourist arrivals and unemployment in Malaysia from 1999 to 2018. The dependant variable for the study is unemployment while tourism arrival is the independent variable. The data of tourist arrivals and unemployment from 1999 to 2018 were obtained from the World Bank. The economics theoretical analysis is carried out by applying the statistical model such as Ordinary Least Square (OLS) to investigate the relationship between variables. In simple terms, the data is analyzed to determine the correlation coefficient and the causal relationship between tourist arrivals and unemployment. The findings of the study show that there is a significant negative relationship between both variables which means when tourism arrival increases, the unemployment issue will decrease in Malaysia. The major finding which is the relationship between tourist arrivals and unemployment is verified based on the correlation coefficient of determination results in this research.