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Does Government Size Explain Unemployment in MENA Countries?

Does Government Size Explain Unemployment in MENA Countries?
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Year:    2020

Author:    Almula-Dhanoon, Mufeed, Dhannoon, Marwan, Hammadi, Mustafa

Applied Economics Quarterly, Vol. 66 (2020), Iss. 3 : pp. 223–238

Abstract

Economists typically believe that government size is an integral determinant of labor market efficiency. Therefore, it is important in practical and theoretical terms to understand the impact of government size on the unemployment rate. Recent empirical studies indicate the negative impact of government size on labor market performance. This paper explores the relationship between government size and the unemployment rate in seventeen MENA countries during the period 2003 – 2017 using seemingly unrelated regression models (SURs). The research found a statistically significant negative effect of government size on the labor market. It also found that total government expenditure as well as investment expenditure play a dampening role on the labor market. Causality tests indicate that there is significant two-way causal relationship between government size and the unemployment rate. But the dynamic analysis of causality indicates one-direction causality from the unemployment rate to government size. The proper policy must therefore start with addressing unemployment in MENA countries, one of whose tools is government sizing.

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Journal Article Details

Publisher Name:    Global Science Press

Language:    German

DOI:    https://doi.org/10.3790/aeq.66.3.223

Applied Economics Quarterly, Vol. 66 (2020), Iss. 3 : pp. 223–238

Published online:    2020-07

AMS Subject Headings:    Duncker & Humblot

Copyright:    COPYRIGHT: © Global Science Press

Pages:    15

Keywords:    Unemployment rate Government Size SURs Method MENA Countries O11 O38

Author Details

Almula-Dhanoon, Mufeed

Dhannoon, Marwan

Hammadi, Mustafa

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    Issa, Ibrahim A. J.

    Al-Mashhadani, Kkalid H. H.

    Tikrit Journal of Administrative and Economic Sciences, Vol. 18 (2022), Iss. 58, 1 P.137

    https://doi.org/10.25130/tjaes.18.58.1.8 [Citations: 0]

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Section Title Page Action Price
Mufeed Almula-Dhanoon / Marwan Dhannoon / Mustafa Hammadi: Does Government Size Explain Unemployment in MENA Countries? 1
Abstract 1
1. Introduction 1
2. Literature Review 3
3. Data and Methodology 5
3.1. Description of Variables 6
3.2. Unit Root Test 7
4. Estimation Results 7
4.1. Government Size Index 7
4.2. Government Expenditure 9
4.3. Types of Government Expenditure 1
4.4. Causality Test 1
References 1