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Almula-Dhanoon, M., Dhannoon, M., Hammadi, M. Does Government Size Explain Unemployment in MENA Countries?. Applied Economics Quarterly, 66(3), 223-238.
Almula-Dhanoon, Mufeed; Dhannoon, Marwan and Hammadi, Mustafa "Does Government Size Explain Unemployment in MENA Countries?" Applied Economics Quarterly 66.3, , 223-238.
Almula-Dhanoon, Mufeed/Dhannoon, Marwan/Hammadi, Mustafa: Does Government Size Explain Unemployment in MENA Countries?, in: Applied Economics Quarterly, vol. 66, iss. 3, 223-238, [online]


Does Government Size Explain Unemployment in MENA Countries?

Almula-Dhanoon, Mufeed | Dhannoon, Marwan | Hammadi, Mustafa

Applied Economics Quarterly, Vol. 66 (2020), Iss. 3 : pp. 223–238

2 Citations (CrossRef)

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Article Details


Author Details

Mufeed Almula-Dhanoon, Professor of Economic Dvelopment, College of Administration and Economics, University of Mosul, Al-Majmoaa Street, Mosul, Iraq.

Marwan Dhannoon, University of Mosul. Dr Marwan contributed to all the details of the research included in this article, but sadly passed away due to the COVID-19 pandemic before the submission of the research published here.

Mustafa Hammadi, University of Mosul.

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Economists typically believe that government size is an integral determinant of labor market efficiency. Therefore, it is important in practical and theoretical terms to understand the impact of government size on the unemployment rate. Recent empirical studies indicate the negative impact of government size on labor market performance. This paper explores the relationship between government size and the unemployment rate in seventeen MENA countries during the period 2003 – 2017 using seemingly unrelated regression models (SURs). The research found a statistically significant negative effect of government size on the labor market. It also found that total government expenditure as well as investment expenditure play a dampening role on the labor market. Causality tests indicate that there is significant two-way causal relationship between government size and the unemployment rate. But the dynamic analysis of causality indicates one-direction causality from the unemployment rate to government size. The proper policy must therefore start with addressing unemployment in MENA countries, one of whose tools is government sizing.

Table of Contents

Section Title Page Action Price
Mufeed Almula-Dhanoon / Marwan Dhannoon / Mustafa Hammadi: Does Government Size Explain Unemployment in MENA Countries? 1
Abstract 1
1. Introduction 1
2. Literature Review 3
3. Data and Methodology 5
3.1. Description of Variables 6
3.2. Unit Root Test 7
4. Estimation Results 7
4.1. Government Size Index 7
4.2. Government Expenditure 9
4.3. Types of Government Expenditure 1
4.4. Causality Test 1
References 1