While self-employment offers young Malaysians the flexibility and freedom to be their own boss, experts warn that prolonged reliance on it could widen income inequality unless better social protections are introduced.
According to figures from the Department of Statistics Malaysia’s (DOSM) MyLabourHub data portal, the number of own-account workers among youths in their early 20s has more than doubled since 2013, from 128,000 to 286,000 last year.
Own-account workers are self-employed individuals who operate their own farm, business or trade without employing paid workers, and include gig workers as well as e-hailing and p-hailing workers.
The sharpest increase was among those aged 20 to 24, whose numbers rose 123% from 2013 to 2025, increasing their share of the own-account workforce from 5.6% to 11%.
Workers aged 25 to 29 also recorded strong growth of 34%, followed by those aged 30 to 34, whose numbers increased by 26%.
Meanwhile, the number of workers aged 45 to 59 declined by between 5% and 20% over the same period.
The workforce has also become increasingly urban.
While own-account workers were almost evenly split between urban and rural areas in 2013, two in three were based in urban areas by 2025.
Khazanah Research Institute (KRI) Associate Director of Research Dr Rachel Gong said the rise in self-employment has been driven partly by the expansion of digital platforms beyond e-hailing and food delivery.
“Today, platforms facilitate a wide range of freelance services, from copywriting and coding to childcare and babysitting,” she said.
She said KRI's 2024 Shifting Tides report found that although more graduates had entered self-employment in recent years, many eventually transition into standard employment because of the greater job security and stable income it offered.
HELP University economics expert Prof Dr Chung Tin Fah said the rise in urban own-account workers could be linked to rural-to-urban migration, as workers moved to cities in search of greater economic opportunities.
“Own-account workers in urban areas are driven by the desire for flexible working hours, freelancing and becoming one’s own boss,” he said.
Chung, however, noted that many forms of self-employment, including gig work, remain unstable, with many workers facing uncertain income and limited long-term career prospects.
Dr Gong said the government had made progress in strengthening social protection and incentives for the self-employed.
However, gig workers - a growing segment of the self-employed workforce - still face challenges as they have limited collective representation and bargaining power.
“They are organising and forming worker associations, and these associations should have a louder voice in negotiations with platforms or in developing policy and programmes to benefit gig workers,” she said.
To better prepare graduates for standard employment, Dr Gong said higher education curricula should be reviewed regularly to align with industry needs.
“There also needs to be policies to ensure adequate social protection and overall support for vulnerable groups, including freelancers, women, and graduates from low-income families,” she said.
University economics professor Dr Yeah Kim Leng said that while the gig economy has entered a more mature phase, significant gaps remain.
These include inconsistent social protection, income uncertainty and unclear employment status.
He said stronger enforcement of mandatory PERKESO and EPF contributions for gig workers, along with broader protection for freelancers and other independent workers, remained necessary.
"If more young Malaysians remain in self-employment, income inequality will worsen as the youth segment experiences weaker income and wage growth," he said.
