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<p>The complexity of unemployment—growth nexus has been a major concern of numerous empirical studies aiming to foster inclusive and sustainable economic growth in line with UN SDGs (8). On these lines, this study aims to assess the unemployment—growth relationship in Gulf Cooperation Council (GCC) economies over the period 1990–2023. The economic model followed in the present study also controls for the influence of labour force participation rate, labour productivity, public expenditure and capital formation that can impact the unemployment—growth relationship. The analysis employed dynamic panel CS-ARDL method to test the relationship among the variables, while controlling for the problems of nonstationarity, cross-sectional dependence, and endogeneity among the variable series. The empirical findings of the study reveal that there exists a long-run equilibrium relationship between the variables. Specifically, the study found a negative long-run impact of economic growth and labour productivity on the unemployment rate. However, this long-run impact is statistically insignificant, which demonstrates that Okun’s law is an ineffective framework for understanding unemployment in GCC economies, a pattern indicative of “jobless growth”. This relationship remains robust even after controlling for the influence of other explanatory variables in the model. The deeper implication is that the standard policy levers (boosting GDP growth) are ineffective for proportional job creation for labor market entrants, resulting from rapidly growing youth population and rising labor force participation rates, especially among women. The paper also discusses important policy recommendations.</p>

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Fostering sustainable growth and employment in the Gulf cooperation council economies

  • 期刊论文

  • 出版模式：

    开放获取

  • 发表日期：

    2026年1月23日

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  • Mushtaq Ahmad Malik,
  • Md. Sarafraz Equbal,
  • Tariq Masood

摘要

The complexity of unemployment—growth nexus has been a major concern of numerous empirical studies aiming to foster inclusive and sustainable economic growth in line with UN SDGs (8). On these lines, this study aims to assess the unemployment—growth relationship in Gulf Cooperation Council (GCC) economies over the period 1990–2023. The economic model followed in the present study also controls for the influence of labour force participation rate, labour productivity, public expenditure and capital formation that can impact the unemployment—growth relationship. The analysis employed dynamic panel CS-ARDL method to test the relationship among the variables, while controlling for the problems of nonstationarity, cross-sectional dependence, and endogeneity among the variable series. The empirical findings of the study reveal that there exists a long-run equilibrium relationship between the variables. Specifically, the study found a negative long-run impact of economic growth and labour productivity on the unemployment rate. However, this long-run impact is statistically insignificant, which demonstrates that Okun’s law is an ineffective framework for understanding unemployment in GCC economies, a pattern indicative of “jobless growth”. This relationship remains robust even after controlling for the influence of other explanatory variables in the model. The deeper implication is that the standard policy levers (boosting GDP growth) are ineffective for proportional job creation for labor market entrants, resulting from rapidly growing youth population and rising labor force participation rates, especially among women. The paper also discusses important policy recommendations.