Can Hiring Quotas Work? The Effect of the Nitaqat Program on the Saudi Private Sector

Jennifer Peck

American Economic Journal: Economic Policy, 2017, vol. 9, issue 2, 316-47

Abstract: This paper studies the effects of quota-based labor regulations on firms in the context of Saudi Arabia's Nitaqat program, which imposed quotas for Saudi hiring at private firms. I use a comprehensive firm-level administrative dataset and exploit kinks in hiring incentives generated by the quotas to estimate the effects of this policy. I find that the program increased native employment at substantial cost to firms, as demonstrated by increasing exit rates and decreasing total employment at surviving firms. Firms without any Saudi employees at the onset of the program appear to bear most of these costs.

JEL-codes: J08 J23 J68 K31 L25 O15 O17 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/pol.20150271
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Citations: View citations in EconPapers (27)

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