The poverty rate in Malaysia has dropped tremendously, whereas income inequality has followed an upward and downward trend. Beginning 1957/58 until 1990, Malaysia has completed one cycle of Kuznets Inverted‐U Hypothesis. However, since the 1990s income inequality is beginning to move upward again. One of the major concerned by the government in line to reduce poverty and income inequality is the role of education. Inequality in educational attainment may contribute inequality in income distribution. This paper attempts to analyze trend of income inequality and poverty in Malaysia. The main objectives of this paper are to look at the distribution of employment by educational status and the relationship between educational attainments amongst employees with income inequality.
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