Saudi Arabia’s Slow Progress on Women Employment

Saudi females still abstain from participating in the labor force. While the new law allowing women to drive is an omen for promoting more equal economic participation for women, several other barriers could still hold women back from their true potential.

A GCC Paradox

There is a paradox in women’s achievement across the GCC, not in Saudi Arabia only. By most international standards, female citizens of the six GCC countries have good access to education and health care, maternal health risks are low, and childcare and family support services are affordable and plentiful. However, women in the Gulf, particularly nationals, are underrepresented, and in some sectors nearly invisible, in the labor force. With 17.7 million women in the GCC, 12.1 million are of working age, 10.2 million are literate, and only 3.3 million are employed.

Saudi females, lowest participation in the GCC

As of 2016, 21% of Saudi women are in the labor force, doubling their rate of participation in a few years. Still, particularly compared to other GCC countries, Saudi Arabia has dismally low rates of female labor force participation. In Saudi Arabia, amongst nationals, there exists 5 employed men for every employed women, compared to 2 in Bahrain, 1 in Kuwait, 2 in Oman, 2 in Qatar, and 3 in UAE 1. This is disappointing given the abundance of wealth in human capital in Saudi Arabia that is not utilized to its full potential.

So, what’s stopping them?

First, cultural norms in Saudi Arabia discourage women from participating in the labor force. The role of women in Saudi Arabia is still confined to domestic responsibilities. In addition, Saudi cultural norms and traditions discourage women from participating in the labor force with 42% of Saudi men and 30% of Saudi females prefer that women stay at home. The Saudi male preference for women to stay at home is higher than the world average of 29% and preferences in other Arab countries such as Lebanon (26%) and the UAE (31%) 2. These cultural norms are particularly stronger for married women: while 50% of single Saudi working-age women that are not studying participate in the labor market (either working or looking for jobs), only 20% of married women do so 3.

Second, women compete over limited public sector jobs. Females perceive public sector work to be far more attractive than private sector jobs. These jobs have higher status and offer shorter working hours with better benefits. Accordingly, the Saudi private sector is composed of 78% expatriate workers and 1% female Saudi nationals 4. On the other hand, a third of public sector jobs is occupied by Saudi females 5. Saudi public schools are the

Third, private sector employers face high costs to hire women. The work environment imposes legal restrictions with a high cost for employing women, making Saudi men and expatriate workers more cost-effective alternatives. Some costs include requirements for separate office spaces and building entrances for female employees. Employers are obliged to pay 10 weeks of maternity leave compared to three days of paternity leave. In addition, employers are obligated to provide childcare facility for working women. During the hiring process, employers bear greater search costs to verify women qualifications with limited previous experience or reference to validate.

Fourth, unequal and discouraging employment regulations depress women employment. Women in Saudi still suffer from unequal employment conditions including a sizeable gender wage gap (for the same job, education, and experience) and income tax regimes that penalize dual-income families. Saudi ranks 109th out of 143 countries for wage inequality according to Global Gender Gap report 6. Female workers also face additional work transportation costs as, until June 2018, they are banned from driving. While the ILO’s minimum standard of paid maternity leave is 14 weeks. GCC countries have the shortest leave: Kuwait (14 weeks), Bahrain (12 weeks), Qatar (10 weeks), Saudi Arabia (10 weeks), and UAE (with the exception of Dubai, 9 weeks) 7. Another barrier to increase female labor participation is the 5 year gender gap in retirement age. While men retire at 60, women are forced to retire at 55 8. This effectively limits women’s career expectations and pensions.

Fifth, women also face barriers in entrepreneurial activity. The discrimination to access of credit is not prohibited in the GCC 9. Access to credit has been consistently cited as one of the top barriers for female entrepreneurs in the GCC. Although female total entrepreneurial activity have been progressing in the GCC from 3.5% in 2009 to 10% in 2014 10, this favorable picture is not reflective of Saudi Arabia. In 2014, Saudi rates remain the lowest with only 2% of women owning a business compared to 10% of men.

Sixth, Saudis’ high wealth provides them with an advantage to wait for the perfect job. Saudi women have high expectations for the kinds of position they are willing to take in terms of job ranking. Unlike other non-GCC Arab countries, women in the GCC might have more resources to take their time and choose their types of job. A study that came out of King Abdulaziz University in Jeddah stated that Saudi women hold nearly 70% of bank accounts with deposits worth 62 billion reals and 20% of corporate shares.

Saudi has been attempting to reform legislation to provide equitable opportunities for females and better access to economic and social opportunities. The most notable example is the new legislation that allow females to drive starting June 2018. While this facilitated mobility provides female better access to employment opportunities, Saudi females will still face several barriers and challenges that discourage their participation in the labor force.


Sources:

GLMM. 2013. Number of men for 100 women in employed national and non-national populations.

Gallup & ILO. 2017. Towards a better future for women and work: Voices of women and men.

General Authority for Statistics. 2016. Saudi Labor Force Survey, 2016q3.

GLMM. 2013. Percentage of non-nationals employed by sector of activity.

Saudi Arabian Monetary Authority. 2011. Annual Report.

WEF. 2016. Global Gender Gap Report.

ILO. 2014. Maternity and Paternity at Work: Law and practice across the world. 

ESCWA. 2012. Addressing Barriers to Women’s Economic Participation in the Arab Region.

9  World Bank. 2016. Women, Business, and the Law

10 A.T. Kearney. 2015. Power Women in Arabia: Shaping the Path for Regional Gender Equality.


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