Oil Revenue, Public Spending, Gross Domestic Product and Employment in Saudi Arabia

Authors

  • Tarek Tawfik Yousef Alkhateeb 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. http://orcid.org/0000-0001-8215-9522
  • Zafar Ahmad Sultan Department of Economics; L.S. College, Muzaffarpur; B.R.A. Bihar University, Muzaffarpur; Bihar, India.
  • Haider Mahmood Prince Sattam Bin Abdulaziz university, Alkharj, Saudi Arabia. http://orcid.org/0000-0002-6474-4338

Abstract

Saudi Arabia has largest oil production and exports in the world. Oil's revenues form the backbone of the economy and it is also a main source of government revenue which determines the major economic activities in the country. This paper has investigated the relationship between oil revenue and employment level by augmenting two more variables like GDP and public spending for a period 1991-2016. We find that there is a cointegration among oil revenue, GDP, public spending and level of employment in Saudi Arabia. The VECM results show that oil revenue and public spending are causing the level of employment in Saudi Arabia. This study observes that declining oil price and its consequent impact on oil revenue may pose a challenge to the economy unless it diversifies its economic base and reduces its dependence on oil sector. Therefore, we recommend the government to reduce oil dependency to improve employment level.      Keywords: Oil Revenue, Employment, CausalityJEL Classifications: C22, E24, H50

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Author Biographies

Tarek Tawfik Yousef Alkhateeb, 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.

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.

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

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

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.

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Published

2017-12-06

How to Cite

Alkhateeb, T. T. Y., Sultan, Z. A., & Mahmood, H. (2017). Oil Revenue, Public Spending, Gross Domestic Product and Employment in Saudi Arabia. International Journal of Energy Economics and Policy, 7(6), 27–31. Retrieved from https://econjournals.com./index.php/ijeep/article/view/5633

Issue

Vol. 7 No. 6 (2017)

Section

Articles

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