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The Effect of Economic Growth on Employment in GCC Countries

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  • Ousama Ben-Salha
  • Mourad Zmami

Abstract

The objective of this research is to analyze the employment intensity of growth in six Gulf Cooperation Council countries between 1970 and 2017. To this end, a two-step econometric methodology is proposed. First, we estimate the time-varying employment intensity of growth using the time-varying parameters model based on the Kalman filter. Second, we identify the short and long-run determinants of the obtained employment intensity of growth using the Pooled Mean Group estimator. The analysis uncovers that elasticities range between 0.4 and 0.6 and has an increasing pattern over time. Findings reveal that in the long-run, the employment intensity is positively affected by trade liberalization, the share of services in GDP, the working-age population growth, and urbanization, while macroeconomic volatility has a negative impact. In the short-run, trade liberalization and natural resource rents exert adverse but weak effects on employment intensity. Based on these findings, some policy recommendations are drawn. JEL Codes - J23; O47; C32; C23

Suggested Citation

  • Ousama Ben-Salha & Mourad Zmami, 2021. "The Effect of Economic Growth on Employment in GCC Countries," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 68(1), pages 25-41, March.
    • Handle: RePEc:aic:saebjn:v:68:y:2021:i:1:p:25-41:n:203
    DOI: 10.47743/saeb-2021-0004
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    More about this item

    Keywords

    economic growth; employment intensity of growth; time-varying parameters model; Gulf Cooperation Council;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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