The State of Households 2026: From Income To Wellbeing

Report Structure:

From Income to Wellbeing: The State of Households 2026 is the sixth edition of KRI’s flagship report on the state of Malaysian households. The report makes the case that wellbeing encompasses many aspects of life, such as working life, health and education. This analysis sheds light on why households with similar incomes may have different levels of wellbeing, depending on factors such as their age and health, or on their access to housing and essential services. It also helps to explain why improving wellbeing requires more than increasing income.

This report encompasses nine sections, split into two parts as outlined below:

Part One: How Households Are Doing

This part explores how Malaysian households are faring across selected dimensions, namely income, expenditure, working life, education, and health:

• Section 1 opens the discussion by introducing DOSM’s two composite measures of wellbeing, the Malaysian Well-Being Index and the Malaysia Happiness Index.
• Sections 2 and 3 examines household income and expenditure, covering trends in distribution, growth, inequality and poverty, as well as spending priorities.
• Section 4 presents an overview of Malaysia’s workforce, examining labour force participation rate, unemployment, employment arrangements and wage distribution across regions.
• Section 5 offers insight into education at preschool, primary, secondary and tertiary levels, covering enrolment, completion rates, and learning outcomes.
• Lastly, Section 6 provides an overview of public health and lifestyle behaviours including diet and physical activity.

Part Two: How Wellbeing is Shaped

This part argues that much of what shapes a household's wellbeing lies beyond the household's immediate control:

• Section 7 looks at how circumstances, such as age and gender, can impact wellbeing.
• Section 8 examines access to essential services, social infrastructure and job opportunities as key mediators for household wellbeing.
• Finally, Section 9 is a timely reflection on how risk in the form of structural dependencies within Malaysia's food system may shape household wellbeing by affecting food availability and affordability.

Key Findings:

Malaysian wellbeing and happiness are improving overall, despite challenges

Malaysia has made progress across several dimensions of wellbeing, and Malaysians are generally classified as happy.

• According to the Malaysian Well-Being Index, wellbeing in Malaysia has generally improved from 2000 to 2024.
• The overall Malaysia Happiness Index score improved from 6.48 in 2021 to 7.60 in 2024, indicating that Malaysians are classified as ‘happy’ and that their happiness has increased.
• The Household Income Survey showed that household incomes continued to recover following the pandemic, with the median monthly income reaching RM7,017 in 2024.

Spatial concentration of economic activities drives spatial variations in income, with income levels in the central region remaining ahead of other states.

• Wages contributed 62.9% to household income in 2024, with higher incomes recorded in areas with higher-paying jobs.
• 111 of Malaysia’s 166 districts had poverty rates higher than the national rate of 5.1% in 2024, with 66 districts having rates at above double the national poverty rate (over 10.2%).

Household expenditure continues to grow, limiting residual income and pressuring lower-income households.

• Cumulatively between 2019 and 2024, household expenditure rose by more than 15% for the lower 70% of the income distribution, while barely changing for the top 10%.
• These increases in expenditure resulted in lower residual income in 2024 compared to 2019.

Wellbeing encompasses many aspects of life beyond income and expenditure, including but not limited to health and access to basic amenities

Evolving food environment and lifestyles affect health; more than half the adult population is above a healthy weight range.

• In 2024, households spent more on eating out than on food at home, averaging RM902.70 per month for eating out compared with RM875.80 for food at home.  
• Diabetes has emerged among the top five causes of death across most states in just two years between 2022 and 2024.
• 32.6% of adults were overweight and 21.8% were obese in 2023, higher than in 2019. This is a key risk for non-communicable diseases (NCDs).

Nearly 100% of households have access to essential services, schools and health facilities.

• Household access to social infrastructure, such as health facilities and schools, has improved at the national level. 97.8% of households were within 5km of a public health facility in 2024. Meanwhile, 98.7% of households were within 5km of a primary school and 95.9% within 5km of a secondary school.

Households’ ability to improve their wellbeing is shaped by many intersecting factors

CIRCUMSTANCES such as age and gender can influence health, working life and income.

• Malaysia has an unevenly distributed ageing population. Perak, with the highest share of households with at least one older person (41.7%), also recorded the largest increase of such households from 35.5% 2022 to 41.7% 2024.
• The prevalence of NCDs such as diabetes, high blood pressure and high cholesterol increases with age.
• Women continue to have lower LFPRs than men, especially in rural regions where there may be a lack of formal employment opportunities compatible with women’s caregiving responsibilities. Women also tend to earn less than men.

ACCESS to decent work provides job satisfaction and social protection.

• Formal employment opportunities are concentrated in urban areas, while rural regions have more informal work arrangements. Households relying on informal work arrangements face greater risks of job insecurity and precarity and have reduced access to employment-related benefits and protections.
• Skill-related underemployment is lowest in Kuala Lumpur at 18.6% in 2024, followed by Pulau Pinang at 26.5%. Combating underemployment has the potential to improve job satisfaction and productivity.

RISKS to wellbeing that arise from international pressures are uneven across households.

• Malaysia’s food security is sensitive to disruptions in global supply chains. Malaysia imports a lot of its food from only a few supplying countries. A crisis disrupting food supply and distribution could lead to price hikes or supply shortages, impacting household wellbeing unevenly.
• Lower-income households devote a much larger share of their expenditure to food than higher-income households - 38.3% for households in the bottom 10% of the income distribution compared to 24.5% for the top 10%. Because lower-income households have less disposable income to start with, the same increase in food prices would impact a larger share of their budget.