The impact of digital transformation on the unemployment rate of women by region in Saudi Arabia

Abstract

The Kingdom of Saudi Arabia announced the digital transformation program within the 2030 vision. It also aimed through the vision to empower women and reduce the unemployment rate. This study aims to test the impact of digital transformation on the female unemployment rate in the different regions of Saudi Arabia. To achieve this, panel data for the variables of the Kingdom's regions were used from 2016 to 2023. The internet penetration rate, the mobile cellular subscription rate, and the percentage of computers, communications, and other services from commercial imports were relied upon as measures of digitization. The study assumes the existence of an inverse relationship between digitization variables and the unemployment rate of women in the regions of the KSA. By estimating the model using the Robust least squares method and then conducting the Granger causality test, the research concluded that the effect of the digitization variables on the rate of Saudi women varied. The research found that the internet penetration rate does not statistically affect the unemployment rate for women in Saudi Arabia. Moreover, increasing the mobile cellular subscription rate leads to an increase in the female unemployment rate. The results showed an inverse effect of commercial imports of computers, communications, and other services on the unemployment rate for women in Saudi Arabia. The results also showed a significant negative relationship between unemployment and inflation rates, education rates, and trade openness. The causality test results showed a relationship runs from the digitization variables to the female unemployment rate and a bidirectional causal relationship between the unemployment rate and the education rate. The results indicate that some other economic factors and variables explain the change in the female unemployment rate in Saudi Arabia. This indicates the importance of expanding efforts to educate and train women on the productive use of digital technology to maximize the benefits of digital transformation.