Assessing the role of foreign labour on Saudi labour unemployment in Saudi Arabia

Saudi labour unemployment is a very serious issue in Saudi Arabia which is further increasing with over dependence on foreign labour. This study empirically investigates this issue by employing ARDL cointegration technique on a sample period of 1980-2015. Our estimates suggest that foreign labour, wage rate and female participation are responsible for an increasing Saudi labour unemployment. On the other hand, number of graduates and government social security benefits are helping in combating Saudilabour unemployment.Therefore, our study recommends the Saudi government to control foreign labour inflows up to some reasonable limit, to rationalize the minimum wage rate and to increase spending on education and social security benefits.