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Oil Price and Employment Nexus in Saudi Arabia

Tarek Tawfik Yousef Alkhateeb, Haider Mahmood, Zafar Ahmad Sultan and Nawaz Ahmad
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Tarek Tawfik Yousef Alkhateeb: Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia
Haider Mahmood: Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia
Zafar Ahmad Sultan: Bihar University, Muzaffarpur; Bihar, India,
Nawaz Ahmad: Department of Economics, University of Lahore, Pakistan

International Journal of Energy Economics and Policy, 2017, vol. 7, issue 3, 277-281

Abstract: Higher oil price is a signal of economic growth in Saudi Arabia due to her heavy dependence on oil revenues. This study has perused the relationship between oil price and employment in Saudi Arabia by using sample period of 1980-2015 and by utilizing the linear and non-linear autoregressive distributed lag (ARDL) models. We have found a positive influence of oil price on employment level in both linear and non-linear ARDL settings. Further, employment effects of increasing and decreasing oil price are found asymmetrical in the non-linear ARDL and we have also found that increasing oil price is positively affecting employment more than declining employment due to fall in oil price. Further, economic growth supports employment significantly. This study recommends the government of Saudi Arabia to save oil revenues in time of prosperity to support employment level in the oil price crisis period.

Keywords: Oil Price; Employment; Non-linear Autoregressive Distributed Lag (search for similar items in EconPapers)
JEL-codes: Q41 E24 C12 (search for similar items in EconPapers)
Date: 2017
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