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Sectoral employment analysis for Saudi Arabia

Author

Listed:
  • Fakhri J. Hasanov
  • Jeyhun I. Mikayilov
  • Muhammad Javid
  • Moayad Al-Rasasi
  • Frederick Joutz
  • Mohammed B Alabdullah

Abstract

This study aims to explore the impact of output and wage on labour demand in Saudi Arabia at sectoral level. We applied cointegration and equilibrium correction methods to the time-series data of 10 sectors over 1995–2016 using the demand side framework and considering the structural breaks in the data. We found that in the long run, the employment is positively affected by the output while the impact of the wage was negative in all sectors. In the short-run, employment growth in all sectors reacted to the wage growth except for the government sector. While only some sectors responded to the output growth, we also found that employment can adjust to the desired equilibrium level in all sectors but time horizon for the adjustment processes varies across the sectors. Differences in estimated coefficients imply that policies should be sector-specific as a ‘one-fits-all’ policy would fail to consider the sectoral specificities.

Suggested Citation

  • Fakhri J. Hasanov & Jeyhun I. Mikayilov & Muhammad Javid & Moayad Al-Rasasi & Frederick Joutz & Mohammed B Alabdullah, 2021. "Sectoral employment analysis for Saudi Arabia," Applied Economics, Taylor & Francis Journals, vol. 53(45), pages 5267-5280, September.
    • Handle: RePEc:taf:applec:v:53:y:2021:i:45:p:5267-5280
    DOI: 10.1080/00036846.2021.1922590
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    Cited by:

    1. Elshurafa, Amro M. & Alatawi, Hatem & Hasanov, Fakhri J. & Algahtani, Goblan J. & Felder, Frank A., 2022. "Cost, emission, and macroeconomic implications of diesel displacement in the Saudi agricultural sector: Options and policy insights," Energy Policy, Elsevier, vol. 168(C).

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