The Asymmetric Impact of Oil Prices on Unemployment in the MENA Region

We examine the effects of oil prices on unemployment rates in the Middle East and North Africa (MENA) over the period of 1991–2017. Using the panel nonlinear autoregressive distributed lag (panel NARDL) model, the results show that in the long run, positive changes of oil prices exert a positive (in...

Full description

Saved in:
Bibliographic Details
Published in:Review of Middle East economics and finance 2021-12, Vol.17 (3), p.175-204
Main Authors: Cheratian, Iman, Farzanegan, Mohammad Reza, Goltabar, Saleh
Format: Article
Language:English
Subjects:
Comparative studies
Dependency
E24
Economic conditions
Economic growth
Growth rate
MENA
oil rents
panel NARDL
Petroleum
Prices
Q43
Rents
resource curse
Unemployment
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We examine the effects of oil prices on unemployment rates in the Middle East and North Africa (MENA) over the period of 1991–2017. Using the panel nonlinear autoregressive distributed lag (panel NARDL) model, the results show that in the long run, positive changes of oil prices exert a positive (increasing) impact on the unemployment rate. However, negative changes in oil prices have a significant decreasing effect on the unemployment rate in the MENA region. We also find that the short run changes in oil prices do not show a significant effect on unemployment rates. Our findings are robust to an alternative measure of oil rents per capita and in line with predictions of the resource curse hypothesis. Countries with higher dependency on natural resource rents experience, on average, a slower long run economic growth rate (and thus higher unemployment rates), compared with countries with lower dependency.
ISSN:1475-3693
1475-3685
1475-3693
DOI:10.1515/rmeef-2021-0004