The State of Households 2024: Households and the Pandemic 2019-2022

This report explores the pandemic's long-term effects, uncovering slower household income growth, increased absolute poverty, and notable changes in household expenditure. It also examines the pandemic's influence on education outcomes and digital adoption.The findings highlight the complex and far-reaching impacts of the pandemic on households across Malaysia.

Key takeaways of the report:

Household Income, Inequality, Poverty and Wealth

1. Income grew steadily at 5.3% from 2009 to 2019, then dropped to a mere 1.0% during 2020 to 2022 period. Real median household income in 2022 was approximately 13% below the pre-COVID trend.
2. Absolute poverty increased in 2019–2022, especially among urban households, rising from 3.8% in 2019 to 4.5% in 2022. Districts with higher poverty also had lower access to basic amenities, indicating a strong overlap between monetary and non-monetary poverty.
3. Household residual incomes declined across all income deciles, with the bottom 10th decile experiencing a significant drop from RM200 in 2019 to -RM16 in 2022. The situation worsened due to COVID-19-related EPF withdrawals, leaving over 90% of EPF members under 30 without sufficient retirement savings.

Household Expenditure

1. The pandemic notably increased overall household expenditures. Mean and median expenditures increased as a percentage of income to 77.6% and 67.6%, respectively, in 2022. Housing and utilities dominated the household consumption basket, followed by food and transport expenditures.
2. Food away from home is rapidly substituting food at home to become an essential part of Malaysian diet. Post-pandemic, Malaysian households spent nearly half, or 48%, of their food expenditure away from home.
3. Work-from-home (WFH) related expenses surged during the pandemic years as households had to adapt to WFH and distance learning during the pandemic. During the pandemic, real housing and utilities as well as ICT spending increased by 10% and 49% respectively.
4. Health expenses rose significantly post-pandemic, with a real CAGR: 11.9% compared to 7.2% between 2016-2019. However, healthcare spending grew unequally across income groups.

Schooling & Digital

1. The impact of school closures on education outcomes is present at the secondary school level. While SPM candidates’ achievements improved at the national level, the incidence of SPM absenteeism has increased post-pandemic. Meanwhile, the gap in student performance between rural and urban areas persists.
2. The impact of school closures on education outcomes is observed globally and to varying extents. Most countries saw lower PISA performance with longer school closures.
3. ICT and virtual learning played a role in mitigating disruptions from school closures in Malaysia, but digital inequalities among students were evident. Students did not have equal access to the internet as well as digital devices, which affected learning outcomes.

Digital & Health

1. Digital use rose during the pandemic, but this use was not sustained evenly. Financial consumer behaviours experienced the most growth between 2017 and 2022 but only remained high post-pandemic among those under 50. Health-related digital use spiked in 2021 and then decreased in 2022, with the rise and fall especially pronounced for those aged 60 and above.
2. Malaysia’s 30-year efforts to digitalise its public healthcare system have faced recurring barriers. These barriers include readiness of outdated “legacy” infrastructure and issues of data integration. In addressing these barriers, the country has transitioned to a more lightweight, mobile and cloud-based approach.
3. A nationwide, future-proof digital health system needs to be patient-centric, well-governed as well as inclusive in nature. The digitalisation of the healthcare system, and of public services overall, needs to be done in public interest, ensuring that it benefits the many and not the few.

Read the full report to understand the pandemic's impact on household income and expenditure, schooling, digital access, and digital health.