ESSAYS ON THE LABOR MARKET OF THE UNITED ARAB EMIRATES
Abi Nahed Chartouni, Carole
The United Arab Emirates (UAE) labor market consists largely of expatriates rather than nationals, the vast majority of which are employed in the private sector. On the other hand, nationals are mostly employed in the public sector and face growing unemployment pressures. This dissertation investigates labor market and demographic policies in the UAE.Chapter 1 builds a two-sector search and matching labor market model to analyze government policies in an economy with a significant public sector. It proves the existence of a unique steady state equilibrium with on the job search in the private sector. It then studies the impact of raising government wages and employment on job creation in the private and public sectors and on unemployment. The paper shows that under some conditions, increasing public sector employment can aggravate the unemployment problem.Chapter 2 examines government policies in a labor market where expatriates constitute a sizeable majority of the labor force. It develops a large firm version of the matching model with intrafirm bargaining. In the model, the firm's hiring decisions are driven by the increasing costs of employing expatriates relative to nationals rather than workers' productivities. This approach contrasts with the prior literature which has captured the employment effect on wages based on assumptions on productivity rather than the firm's cost structure. The model is calibrated to UAE data. It finds that beyond a certain cost level of employing expatriates, the firm would decrease overall employment and unemployment for nationals rises.Chapter 3, co-authored with M. Al Awad, explores certain factors that have contributed to the decline in fertility in the UAE. Employing data from the 2008 UAE Household Expenditure Survey, the paper analyzes the determinants of fertility using a Poisson fertility count model. The results show that economic factors, in terms of the costs and benefits that families derive from children in the UAE are not important determinants of fertility. The primary cause for the decline in fertility is the higher levels of female education. Other contributors to drops in fertility are marriages between national males and foreign females and polygamous marriages.
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