Author

Saud Kabli

Abstract

Unemployment is one of the biggest challenges facing the Kingdom of Saudi Arabia, especially among youth. The Saudi government embarked on a national plan to increase employment among nationals and decrease the number of foreign labor force. The Saudization program did not yield the expected results, and efforts were made to reform the program in 2011 under the “Nitaqat Program”. Despite enhancements to the Saudization program, the analysis reveals that unemployment levels remained almost stagnant throughout the past decade. The Saudi labor force is increasing by a rate equal to the rate of employment among nationals, thus keeping unemployment rates stagnant. The Saudi labor market suffers from number of distortions; chiefly; the wage differential between nationals and non-nationals in the private sector, the wage differential between nationals in both private and public sectors, and decreased labor productivity in the private sector. Also, the reservation wage among Saudi-nationals is high due to dependency ratio and the introduction of an unemployment benefit that is two-thirds the amount of the national minimum wage. On the other side the cost of foreign labor in the market remains low despite the introduction of measures to increase this cost on private sector employers. In addition, the education system has not catered to the needs of the labor market, which suffers a skill gap in demand and supply. The lack of vocational and technical skills is visible in the market, while a mismatch exists between higher education and labor market needs. The dependence of the Saudization program on quota-based, legal-interventionist methods is proving to be a challenge, further attesting to the need to rely more on a market driven system. Unless the distortions in the labor market are addressed, the Saudization efforts will remain stagnant, since these distortions are creating an imperative for youth unemployment.

Department

Public Policy & Administration Department

Date of Award

2-1-2015

Online Submission Date

January 2015

First Advisor

Ali, Hamid

Committee Member 1

Korany, Bahgat

Committee Member 2

Barsoum, Ghada

Document Type

Thesis

Extent

91 p.

Library of Congress Subject Heading 1

Unemployment -- Saudi Arabia -- 21st century.

Library of Congress Subject Heading 2

Labor service -- Saudi Arabia -- 21st century.

Rights

The author retains all rights with regard to copyright. The author certifies that written permission from the owner(s) of third-party copyrighted matter included in the thesis, dissertation, paper, or record of study has been obtained. The author further certifies that IRB approval has been obtained for this thesis, or that IRB approval is not necessary for this thesis. Insofar as this thesis, dissertation, paper, or record of study is an educational record as defined in the Family Educational Rights and Privacy Act (FERPA) (20 USC 1232g), the author has granted consent to disclosure of it to anyone who requests a copy.

IRB

Not necessary for this item

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