LABOR INCOME AND OIL WEALTH: A BROADER SUSTAINABILITY FRAMEWORK FOR SAUDI ARABIA

Hend Al Sheikh () and S. Nuri Erbaş ()
Additional contact information
Hend Al Sheikh: Institute of Public Administration (IPA), Riyadh, Saudi Arabia

Middle East Development Journal (MEDJ), 2013, vol. 05, issue 02, 1-31

Abstract: Actuarial sustainability of income from exhaustible resources requires that present and future generations get equal shares of income. Significant omission is labor market conditions. This paper proposes a broader framework for sustainability assessment that incorporates labor market conditions. Theoretical analysis indicates that current generations' income level is not sustainable for future generations with declining wages, even if oil income is sustainable into the foreseeable future in the actuarial sense. Saudi worker income has not been sustained as private-sector wages declined sharply in recent decades, while government-sector worker income increased. The paper reviews Saudi Arabia's labor market conditions with recent supporting data to explain the causes of persistent unemployment and declining wages. A major cause is labor market distortions resulting from government-sector wage policies. Empirical findings substantiate the theoretical arguments. Discussion of salient policy issues concludes the paper.

Keywords: Saudi Arabia labor markets; unemployment; wage and oil income sustainability (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S1793812013500132
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:medjxx:v:05:y:2013:i:02:n:s1793812013500132

Ordering information: This journal article can be ordered from

DOI: 10.1142/S1793812013500132

Access Statistics for this article

Middle East Development Journal (MEDJ) is currently edited by Lyn Squire

More articles in Middle East Development Journal (MEDJ) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().