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  3. American Economic Journal: Economic Policy
  4. May 2017
  5. Can Hiring Quotas Work? The Effect of the Nitaqat Program on the Saudi Private Sector

Can Hiring Quotas Work? The Effect of the Nitaqat Program on the Saudi Private Sector

  • Jennifer R. Peck
American Economic Journal: Economic Policy
vol. 9, no. 2, May 2017
(pp. 316-47)
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Abstract

This paper studies the effects of quota-based labor regulations on firms in the context of Saudi Arabia's Nitaqat program, which imposed quotas for Saudi hiring at private firms. I use a comprehensive firm-level administrative dataset and exploit kinks in hiring incentives generated by the quotas to estimate the effects of this policy. I find that the program increased native employment at substantial cost to firms, as demonstrated by increasing exit rates and decreasing total employment at surviving firms. Firms without any Saudi employees at the onset of the program appear to bear most of these costs.

Citation

Peck, Jennifer R. 2017. "Can Hiring Quotas Work? The Effect of the Nitaqat Program on the Saudi Private Sector." American Economic Journal: Economic Policy, 9 (2): 316-47. DOI: 10.1257/pol.20150271

Additional Materials

JEL Classification

  • J08 Labor Economics Policies
  • J23 Labor Demand
  • J68 Mobility, Unemployment, and Vacancies: Public Policy
  • K31 Labor Law
  • L25 Firm Performance: Size, Diversification, and Scope
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
  • O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
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