More Saudi women to seek jobs as driving ban ends: Oxford Economics

Saudi Arabia’s lifting of driving ban on women will increase the share of women in the workforce, but will boost its potential GDP growth by mere 0.1 percent a year, Oxford Economics said in a recent report.

"Many Saudi women are keen to work and will seek jobs now that it is legal for them to drive despite other major barriers remain in place, including gender segregation and the strict guardianship system," the report noted.

“The economic impact of the end of the driving ban will largely depend on how many of the new female entrants to the labour market actually find work, which is expected to be a big challenge," it added.

Currently, the labour participation rate among Saudi women stands at 22 percent. Though the rate has been slowly climbing, it remains the lowest globally and is almost 8 percentage points below that in Oman.

Meanwhile, the expansion of the female labour force will also reinforce an already-high unemployment rate among Saudi nationals, as more women compete for a limited number of jobs.

The total number of jobless Saudis stands above 770,000, or 12.8 percent of the total domestic workforce. At over 425,000, this represents about one-third of working-age Saudi females, with the majority holding university degrees.

Reducing the unemployment rate to 7 percent over the next 12 years is a central aim of the government’s Vision 2030 economic reform plan.

"Without stronger private-sector job creation, the government will find it difficult to reduce the chronically high unemployment rate among nationals to 7 percent in 2030," the report stated.

Besides, the target will likely be missed unless the government can persuade nationals to either work for more competitive wages or enroll in skills training programmes to enhance their employability.

"This will likely prove difficult, given that cost of living is often cited as one of the top concerns among Saudis for living independently, while unemployment benefits are generous (with a minimum of $533 and up to $2,400 monthly for the first three months under the Hafiz programme)," Oxford Economics said.