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The main objective of this research was to develop a theoretical model capable of explaining the changes in foreign labor and its ratios in Saudi labor market, using annual time-series data spanning the period 1963-1985. In a reduced form, the model has been derived from the theoretical underpinnings of the supply and demand for labor in Saudi Arabia's labor market. In this model, the explanatory (independent) variables influencing foreign labor and its ratios have been identified and thoroughly explained; they consisted of both "pull" factors and "push" factors. The model was then used as a guiding tool or framework for the empirical estimation of the explanatory variables assumed to affect foreign labor and its ratios in the labor market economywide and in the oil sector employment as well. The results of the empirical estimation show evidence of the significant economic forces at work in the Saudi labor market. Both the "pull" and the "push" factors seem to be working in shaping the labor market in that they significantly affect the flow of foreign labor into and out of Saudi Arabia. In addition, another objective of this study consisted of a theoretical analysis of the "kafil" system--a sponsor/migrant foreign worker relationship that has evolved in Saudi Arabia over the last four decades. In this regard, the purpose was to describe and analyze the kafil's role in the flow of foreign labor into Saudi Arabia's labor market. The historical evolution of the kafil system was described in greater detail, then an attempt was undertaken to analyze the implications of its economic efficiency and its distributional effects, using three different theoretical models developed for this purpose.