Oil Price and Employment Nexus in Saudi Arabia


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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 LagJEL Classifications: Q41, E24, C12

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Author Biographies

Tarek Tawfik Yousef Alkhateeb, Prince Sattam Bin Abdulaziz university, Alkharj, Saudi Arabia. and Kafr Elsheikh University

Assistant Professor, Department of Marketing, College of Business Administration, Prince Sattam Bin Abdulaziz  university, Alkharj, Saudi Arabia and Professor, Department of Agricultural Economics, Kafr Elsheikh University, Egypt.

Haider Mahmood, Prince Sattam Bin Abdulaziz university, Alkharj, Saudi Arabia.

Assistant Professor, Department of Finance, College of Business Administration, Prince Sattam Bin Abdulaziz  university, Alkharj, Saudi Arabia.

Zafar Ahmad Sultan, Bihar University

Department of Economics; L.S. College, Muzaffarpur; B.R.A. Bihar University, Muzaffarpur; Bihar, India.

Nawaz Ahmad, University of Lahore

Assistant Professor, Department of Economics, University of Lahore, Pakistan.

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Published

2017-07-18

How to Cite

Alkhateeb, T. T. Y., Mahmood, H., Sultan, Z. A., & Ahmad, N. (2017). Oil Price and Employment Nexus in Saudi Arabia. International Journal of Energy Economics and Policy, 7(3), 277–281. Retrieved from https://econjournals.com/index.php/ijeep/article/view/4881

Issue

Vol. 7 No. 3 (2017)

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Articles

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