To what extent have Vision 2030 policies contributed to the reduction in youth unemployment in Saudi Arabia, and how does this compare to the expected trend in the absence of these policies?

Abstract

This study examines the causal impact of Saudi Arabia's Vision 2030 policies on youth unemployment using the Synthetic Difference-in-Differences (SDID) methodology. Launched in 2016, Vision 2030 represents Saudi Arabia's ambitious economic transformation program that aims to diversify the economy and create sustainable job opportunities. During youth unemployment in Saudi Arabia fell from 27.3% in 2016 to 16.25% in 2023, this research seeks to determine how much this reduction can be attributed to Vision 2030 policies versus external economic factors. By building artificial counter-facts from a similar oil exporting economies including Kuwait, Russia, UAE, Algeria and Oman, analysis estimates. Vision 2030 policies reduced youth unemployment by about 5.8 percentage points by 2023, which represents 58% of the noticeable decline, the effect was heterogeneous, with the largest effects on young women (7.3 percentage points) of males (4.2 percentage points), and for third Educated youth (6.5 percentage points) compared to those with secondary education (4.9 Percentage points). The time pattern reveals minimal effects during the period 2016-2018, followed by accelerating effects in 2021-2023, indicating increased policy effectiveness with implementation maturation and complementary reforms reach a critical mass.