Macroeconomic Instability, Environmental Factors, and Unemployment: A Comparative Analysis of Malaysia and Indonesia

ABSTRACT An increasing cost of living with lower purchasing power due to unemployment after the COVID‐19 pandemic and unstable macroeconomic factors became an important issue discussed worldwide. These matching problems, faced especially by fresh graduates and workers in securing their job opportunities during this turbulent time (2020–2022), need to be researched to prevent social issues. This issue motivates us to study the effect of matching problems on the unemployment rate between Malaysia and Indonesia amid poly‐crises due to the widespread coronavirus disease and economic crisis. Secondary data were utilized to (1) compare the unemployment rate between these two countries and (2) investigate the impact of the number of cases of COVID‐19 and economic factors on the unemployment rate. Data on macroeconomic factors were obtained from Bloomberg, and the numbers of COVID‐19 cases were obtained from the World Meters website, which is validated by the World Health Organization (WHO). The results show that there is a crucial average variation in the rate of unemployment between Malaysia and Indonesia, even though both countries are in the neighborhood region. Besides, the effect of the matching problem faced by both countries also indicates a significant and negative effect, especially on gross domestic product and COVID‐19, on unemployment.