Assessing the Role of Foreign Labour on Saudi Labour Unemployment in Saudi Arabia

Alkhateeb, Tarek Tawfik Yousef and Alkahtani, Nasser Saad and Mahmood, Haider (2017): Assessing the Role of Foreign Labour on Saudi Labour Unemployment in Saudi Arabia. Published in: International Journal of Applied Business and Economic Research , Vol. 15, No. 22 (1 December 2017): pp. 99-109.

Abstract

Saudi labour unemployment is a very serious issue in Saudi Arabia which is further increasing with over dependence on foreign labour. This study empirically investigates this issue by employing ARDL cointegration technique on a sample period of 1980-2015. Our estimates suggest that foreign labour, wage rate and female participation are responsible for an increasing Saudi labour unemployment. On the other hand, number of graduates and government social security benefits are helping in combating Saudi labour unemployment. Therefore, our study recommends the Saudi government to control foreign labour inflows up to some reasonable limit, to rationalize the minimum wage rate and to increase spending on education and social security benefits.

Social Security Benefits; Cointegration

• Item Type: MPRA Paper
• Language: English
• Keywords: Key Words: Saudi Labour Unemployment; Foreign Labour
• Subjects: J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers

References

D’Amuri, F., Ottaviano, G.I.P. and Peri, G. (2010), The Labor Market Impact of Immigration in Western Germany in the 1990s, European Economic Review, Vol. 54, pp. 550-570.

Feridun, M. (2004), Does Immigration have an Impact on Economic Development and Unemployment? Empirical Evidence from Finland (1981-2001), International Journal of Applied Econometrics and Quantitative Studies, Vol. 1, pp. 39-60.

Feridun, M. (2005), Economic Impact of Immigration on the Host Country: The Case of Norway, Prague Economic Papers, Vol. 4, pp. 350-362.

Feridun, M. (2007), Immigration, Income and Unemployment: An Application of the Bound Testing Approach to Cointegration, The Journal of Developing Area, Vol. 41, no. 1, pp. 37-49.

Jean, S. and Jimenez, M. (2011), The Unemployment Impact of Immigration in OECD Countries, European Journal of Political Economy, Vol. 27, no. 2, pp. 241-256.

Kemnitz, A. (2003), Immigration, Unemployment and Pensions, The Scandinavian Journal of Economics, Vol. 105, no. 1, pp. 31-48.

Konya, L. (2000), Bivariate Causality Between Immigration and Long-Term Unemployment in Australia, 1981-1998. Victoria University of Technology Working Paper, No 18/00.

Longhi, S., Nijkamp, P. and Poot, J. (2005), A Meta-Analytic Assessment of the Effect of Immigration on Wages, Journal of Economic Surveys, Vol. 19, no. 3, pp. 451–477.

Marr, W.L. and Siklos, P.L. (1994), The Link between Immigration and Unemployment in Canada, Journal of Policy Modeling, Vol. 16, pp. 1-26.

Marr, W.L. and Siklos, P.L. (1995), Immigration and Unemployment: A Canadian Macroeconomic Prospective. In Diminishing returns: the economics of canada’s recent immigration policy, Toronto, pp. 293-330.

Ng, S. and Perron, P. (2001), Lag Length Selection and the Construction of Unit Root Tests with Good Size and Power, Econometrica, Vol. 69, pp. 1519-1554.

Pesaran, M.H., Shin, Y. and Smith, R. (2001), Bounds Testing Approaches to the Analysis of Level Relationships, Journal of Applied Econometrics, Vol. 16, no. 3, pp. 289-326.

Rodrik, D. (1997), What Drive Public Employment? NBER Working Papers No. 6141.

Shan, J., Morris, A. and Sun, F. (1999), Immigration and Unemployment: New Evidence from Australia and New Zealand, International Review of Applied Economics, Vol. 13, no. 2, pp. 253-260.

Triandafyllidou, A. (2016), The Routledge Handbook of Immigration and Refugee Studies, London: Routledge.

Tyers, R. and Yang, Y. (1997), Trade with Asia and Skill Upgrading: Effects on Factor Markets in Older Industrial Countries, Weltwirtschaftliches Archiv, Vol. 133, no. 3, pp. 383-418.

Waal, J.V.D. (2012), Post-Industrialization, Immigration and Unemployment: How and Why the Impact of Immigration on Unemployment Differs between Dutch Cities, Urban Studies, Vol. 49, no. 8, pp. 1711-24.

Withers, G. and Pope, G.D. (1993), Immigration and Unemployment, Economic Record, Vol. 61, pp. 11-13.

Ahmad, K. & Mahmood, H. (2013). Macroeconomic Determinants of National Savings Revisited: A Small Open Economy of Pakistan. World Applied Sciences Journal, 21(1), 49-57.

Ahmad, K., & Mahmood, H., (2013). Openness-Inflation Puzzle: Evidence from Pakistan. The Bangladesh Development Studies, 69-78.

Ahmad, N., Iqbal, A. and Mahmood, H. (2013). CO2 Emission, Population and Industrial Growth linkages in Selected South Asian Countries: A Co-integration Analysis. World Applied Sciences Journal, 21(4), 615-622.

Alkhateeb, T.T.Y, Mahmood, H. & Sultan, Z.A. (2016). The Relationship between Exports and Economic Growth in Saudi Arabia. Asian Social Science. 12(4), 117-124.

Alkhateeb, T.T.Y., Alkahtani, NS, Mahmood, H., (2017). Assessing the Role of Foreign Labour on Saudi Labour Unemployment in Saudi Arabia. International Journal of Applied Business and Economic Research 15, 22.

Alkhateeb, T.T.Y., Mahmood, H., Sultan, ZA & Ahmad, N. (2017). Trade Openness and Employment Nexus in Saudi Arabia. International Journal of Economic Research, 14 (14), 56-66.

Alkhateeb, T.T.Y., Mahmood, H., Sultan, ZA, Ahmad, N. (2017). Financial market development and employment nexus in Saudi Arabia. International Journal of Applied Business and Economic Research 15 (21), 165-174.

Alkhateeb, TT, Ajina, AS, George, S, & Mahmood, H., (2017). Egyptian intra agriculture trade with GAFTA members: Reilly’s law of retail gravitation and marketing effects. International Journal of Economic Research 14 (9), 137-147.

Habib, A., Rehman, V, Zafar, T., Mahmood, H., (2016). Does sustainability hypothesis hold in developed countries? A panel co-integration analysis. Quality & Quantity, 50 (1), 1-25.

Hassan, M.U., Mahmood, H. & Hassan, M.S. (2013). Consequences of Worker’s Remittances on Human Capital: An In-Depth Investigation for a Case of Pakistan. Middle-East Journal of Scientific Research, 14 (3), 443-452.

Hassan, MU, Hassan, MS, & Mahmood, H., (2013). An empirical inquisition of the impact of exchange rate and economic growth on export performance of Pakistan. Middle-East Journal of Scientific Research 14 (2), 288-299.

Liaquat, S., & Mahmood, H., (2017). Electricity consumption and economic growth in Pakistan: Menace of circular debt. International Journal of Economics and Business Research, 13 (3), 227-245.

Mahmood, H. & Alkhateeb, T.T.Y. (2017). Trade and Environment Nexus in Saudi Arabia: An Environmental Kuznets Curve Hypothesis. International Journal of Energy Economics and Policy, 7(5), 291-295.

Mahmood, H. and Chaudhary, A.R. (2012). A Contribution of Foreign Direct Investment in Poverty Reduction in Pakistan. Middle-East Journal of Scientific Research, 12 (2), 243-248.

Mahmood, H., & Alkhateeb, T.T.Y. (2017). An Estimation of Service Quality in King Khalid Hospital, Saudi Arabia. International Journal of Applied Business and Economic Research, 15 (16), 459-467.

Mahmood, H., & Asif, M., (2016). An empirical investigation of stability of money demand for GCC countries. International Journal of Economics and Business Research, 11 (3), 274-286.

Mahmood, H., & Chaudhary, A.R. (2009). Application of endogenous growth model to the economy of Pakistan: A cointegration approach. Pakistan Journal of Commerce and Social Sciences, 2, 16-24.

Mahmood, H., (2016). Determinants of Bilateral Foreign Direct Investment Inflows in Pakistan from major investing countries: A dynamic panel approach. Journal of Applied Economic Sciences, 11 (7), 1471 – 1476.

Mahmood, H., (2016). Revisited Money Demand function for GCC countries and testing its stability. Journal of Economics and Economic Education Research, 17 (2), 137 – 148.

Mahmood, H., (2016). Testing fiscal sustainability under inter-temporal budget constraint in Saudi Arabia. Actual Problems of Economics 185 (11), 356-362.

Mahmood, H., A Ali, MI Chani (2013). Determinant of Aggregate Imports Demand Function: A Case of Tunisia. International Journal of Economics and Empirical Research, 1 (6), 74 – 82.

Mahmood, H., Al Khateeb, V, & Ahmad, N (2017). Impact Of Devaluation On Industrial Exports In Saudi Arabia: J-Curve Analysis. Actual Problems in Economics 189 (3), 331-41.

Mahmood, H., Alkhateeb, T.T.Y., & Ahmad, N (2017). Impact of devaluation on service sector exports in Saudi Arabia: non-linear ARDL approach. Economic annals-XXI, 36-40.

Mahmood, H., Alkhateeb, T.T.Y., & Ahmad, N. (2017). Impact of Devaluation on Foreign Trade in Saudi Arabia. International Journal of Applied Business and Economic Research, 15 (17), 13.

Mahmood, H., Alkhateeb, T.T.Y., Ahmad, N. (2017). Impact of Devaluation on Saudi Oil Exports: The J-Curve Analysis. International Journal of Economic Research, 14 (9), 375-383.

Mahmood, H., Alkhateeb, T.T.Y., N Maalel (2016). Egyptian intra agriculture trade with Common Market for Eastern and Southern Africa trading partners: A gravity model. International Journal of Economics and Financial Issues 6 (6S), 177-182.

Mahmood, H., Al-Khateeb, TTY (2017). Testing asymmetrical effect of exchange rate on Saudi service sector trade: a non-linear ARDL Approach. International Journal of Economics and Financial Issues 7 (1), 73-77.

Mahmood, H., Chaudhary, A.R. (2012). Impact of FDI on human capital in Pakistan. Asian Journal of Empirical Research 2 (3), 84-91.

Mahmood, H., Chaudhary, A.R. (2012). Impact of sector-specific FDI on sector-specific labor productivity in Pakistan. World Applied Sciences Journal 19 (4), 566-574.

Mahmood, H., Siddiqi, MW, Iqbal, A., & Tabassum, V. (2010). Impact of foreign aid and levels of education on democracy in Pakistan. International Journal of Human and Social Sciences 5 (4), 206-209.

Mahmood, H.,, Chaudhary, A.R. (2012). Foreign direct investment-domestic investment nexus in Pakistan. Middle-East Journal of Scientific Research, 11 (11), 1500-1507.

Mancur, O., (1993). Dictatorship, Democracy, and Development. American Political Science Review 87:3, 567-576.

Mehmood, B., Mahmood, H., & Ahmed, RS (2014). Macro-financial covariates of non-performing loans (NPLs) in Pakistani commercial banks: A reexamination using GMM estimator. International Journal of Economics and Empirical Research, 2, 11.

Hassan, M. Wajid, A., Mahmood, H., & Shahbaz, M. (2015). Testing relevance of twin deficit for a transition economy like Pakistan. Transylvanian Review of Administrative Sciences, 11 (46), 91-106.

Nawaz, T., Khan, M., A., Shah, M.,A.,A. and Aleem, M., (2012). Impact of Democratic / Non Democratic Regimes on Foreign Direct Investment in Pakistan: Pre and Post September 11, 2001 Scenarios. Pak. J. Commer. Soc. Sci, 6:1, 67-82.

Shah, Z. and Masood, Q., A., (2003). The Determinants of Foreign Investment in Pakistan: An Empirical Investigation. The Pakistan Development Review, 42:4, 697-714.

Younas, Z., Mahmood, H., A Saeed (2014). Effect of Firm Performance on Corporate Governance a Panel Data Analysis. Asian Journal of Empirical Research, 3 (1), 1-8.