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Labor-Use Efficiency in Saudi Manufacturing Sectors

Author

Listed:
  • Ali Saggay

    (College of Islamic Economics and Finance, Umm Al-Qura University Saudia Arabia)

  • Asma Raies

Abstract

This paper seeks to examine the process of adjustment in labor and to measure labor-use efficiency in Saudi manufacturing sectors. The theoretical framework is based on a dynamic flexible adjustment model applied to a panel of seven Saudi industries observed from 2007 to 2015. It investigates the process of adjustment in labor Saudization level toward a desired level. The adjustment process is both industrial and time-specific, and is expressed in terms of factors affecting the speed of adjustment. The empirical results show that, in the long run, labor Saudization responds greatly to gross domestic product, followed by unit Saudi wage and least by non-Saudi labor. In addition, labor over-use in Saudi manufacturing sectors is reduced after application of Nitaqat program. JEL Classification Numbers: C33; E31; F14; L60.

Suggested Citation

  • Ali Saggay & Asma Raies, 2018. "Labor-Use Efficiency in Saudi Manufacturing Sectors," Journal of Reviews on Global Economics, Lifescience Global, vol. 7, pages 174-185.
    • Handle: RePEc:lif:jrgelg:v:7:y:2018:p:174-185
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    File URL: https://lifescienceglobal.com/independent-journals/journal-of-reviews-on-global-economics/volume-7/85-abstract/jrge/3179-abstract-labor-use-efficiency-in-saudi-manufacturing-sectors
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    More about this item

    Keywords

    Labor Saudization; Labor-use efficiency; Panel data; Saudi; Speed of adjustment; Technical change.;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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