Unemployment In The Gulf Countries: Reasons And Remedies

It is important to note that the negative development on the Gulf States' labour market cannot be attributed to differences in the size of the working age population or the participation rates among working age people. Hence, it would be wrong to argue that labour supply has risen so much in the Gulf, no wonder that labour demand could not expand by an equivalent amount. An extreme version of this thinking is reflected in the folly notion of a lump sum of labour which argues that unemployment can only be solved by dividing more equally among workers a given pie of labour demand. This paper aims at contributing to a better understanding of indigenous problems and their impact on aggregate equilibrium unemployment and social welfare. The paper seeks to diagnose the problem in the six GCC states and suggests some method somewhat connected with a scheme for enhancing social welfare whereby to rectify the current situation with policy implications deemed appropriate for the current situation.