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Comparing the Employment-Output Elasticities of Expatriates and Nationals in the Gulf Cooperation Council, Alberto Behar

We estimate the elasticity of private-sector employment to non-oil GDP in the Gulf Cooperation Council (GCC) for GCC nationals and expatriates using a Seemingly Unrelated Error Correction (SUREC) model. Our results indicate that the employment response is lower for nationals, who have an estimated short-run elasticity of only 0.15 and a long-run response of 0.7 or less. The elasticity is almost unity for expatriates in the long run and 0.35 in the short run. We interpret low elasticities as indirect evidence of labor market adjustment costs, which could include hiring and firing rigidities, skills mismatches, and reluctance to accept private sector jobs. Forecasts suggest that, absent measures to reduce adjustment costs, the private sector will only be able to absorb a small portion of nationals entering the labor force
Table Of Contents
Cover -- Contents -- Abstract -- I. Introduction -- II. Data and Descriptive Statistics -- A. Sources -- B. Descriptive Statistics -- III. Econometric Analysis -- A. Estimation Approach -- B. Estimation Results -- SUREC Estimation -- The Short, Medium and Long Run -- IV. Scenario Analysis For Nationals -- In-Sample Forecasts of Private-sector Employment -- Private-sector Employment Forecasts Under Multiple Scenarios -- V. Diagnosis and Policy Implications -- What the Elasticities Imply about Labor Market Characteristics -- Possible Policy Responses -- VI. Conclusions -- References -- Tables -- 1: Private-Sector Employment -- 2: Seemingly Unrelated Regressions -- 3: Single Equation Estimates, Expatriates -- 4: Single Equation Estimates, Nationals -- Figures -- 1: Employment by Sector and Nationality -- 2: Percent of Nationals' Employment, Percent of Nationals' Employment -- 3: Private-sector Employment for Nationals, Percent of Private-Sector -- 4: Dynamics of Employment Responses -- 5: In-sample Forecasts, Nationals -- 6: Private-sector Employment Projections -- 7: Labor Market Projections, 2015-2020 -- 8: Science and Mathematics Education Quality -- 9: Preferred Employer for Youth
Literary Form
non fiction
Physical Description
1 online resource (35 pages)
Specific Material Designation
Form Of Item

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