Around the world, finding a job is much more challenging for women than it is for men. When women are employed, they tend to work in low-quality jobs in vulnerable conditions, and there is little improvement forecast.

However, Saudi Arabia’s efforts to boost female employment have been paying off as the kingdom’s reforms have nearly doubled the female participation rate, from 19% in 2016 to 36% in 2022, and boosted the overall workforce participation rate to a record-high of 61.7% in March 2023. 

S&P Global attributes this increase to improved female education, cultural liberalization, and a drop in fertility rates.

In the first quarter of 2023, Saudi Arabia’s unemployment rate fell from double digits to 8.46%, compared to the same period last year, driven by an increase in real wages driven by a rise in women joining the workforce.

In Q1 2023, 18.7% of the 15.4 million people employed in Saudi Arabia were women, according to a report titled “Saudi Labour Market” by CI Capital.

The unemployment rate in Saudi Arabia dropped from 10.05% to 8.46% in Q1 2023. However, this was a marginal increase from the previous quarter’s 7.95%

The number of expat workers reached 7.8 million, the highest since Q4 2017. The construction and agriculture sectors accounted for 53% of new expat hires. Expats currently account for 75% of Saudi Arabia’s total labor market. This number continues to rise as the salary gap between expats and nationals narrows.

The private sector has become a top draw for Saudi nationals, with a 1.8% increase in numbers in Q1 2023. This pushed the total number of Saudis employed in the private sector to 2.23 million out of 9.9 million nationals in the workforce. 

Saudi Arabia’s private sector is attracting more Saudi nationals, thanks to a 25% increase in the minimum wage to $1,066 per month last September. 

Manufacturing, wholesale and retail trade, and transportation and storage sectors hired 60% of new Saudi workers in the first quarter of this year.

Overall, real wages grew 1.7% in the first quarter compared to the fourth quarter of last year, but the increase was largely driven by a 2.6% rise in paychecks for Saudi men. Saudi women’s wages only increased 0.2% in the same period, despite a push to get more women into the workforce.

In the first quarter of 2023, 33,000 female nationals joined the workforce, representing a 3.4% increase compared to the previous quarter, according to CI Capital.

S&P Global estimates that if workforce participation continues to grow at the current pace for the next ten years, the Saudi economy could be $39 billion, or 3.5%, larger than it would be under a hypothetical scenario with historical (2000-2022) workforce participation rate growth.