Advances in Economics and Business Vol. 4(12), pp. 657 - 666
DOI: 10.13189/aeb.2016.041204
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Do Foreign Workers' Positive Contributions to GDP Outweigh the Negative Effect of Their Outward Remittances on GDP? A Case Study of Saudi Arabia


Fayq Al Akayleh *
College of Business Administration, Al Yamamah University, Saudi Arabia

ABSTRACT

This paper examines the effects of foreign workers' outward remittances on the economic activity of a country that hosts foreign labor by developing a new econometric technique to measure the effect of workers' outward remittances on gross domestic product of the world's largest oil producer, namely Saudi Arabia. Results indicate that outward remittances have negative and significant effects on all types of aggregate demand. The total effect of outward remittances on GDP is, then, negative. The study findings prove that the net effect of non-Saudi workers on GDP is positive for the Saudi GDP.

KEYWORDS
Regression Estimation, International Migration, Remittances, Production and GDP, Government Policy and Regulations, Saudi Arabia

Cite this paper
Fayq Al Akayleh . "Do Foreign Workers' Positive Contributions to GDP Outweigh the Negative Effect of Their Outward Remittances on GDP? A Case Study of Saudi Arabia." Advances in Economics and Business 4.12 (2016) 657 - 666. doi: 10.13189/aeb.2016.041204.