Saudi Arabia’s surplus graduates & employment

Is the world’s largest oil exporter training too many graduates?  
That is the question that Nader Habibi is raising in University World News of Issue No. 376.

Since nearly a decade, Saudi leaders allocated large financial resources to modernize the country’s higher education system.  For instance, under King Abdullah “the fiscal budget for higher education grew steadily to nearly 10% of the total fiscal budget in 2012 and has not fallen below this share ever since” Habibi notes. Thus we witnessed a rapid increase in university enrolment and great progress in academic achievements.

But there are concerns that “the rapid increase in the quantity of university graduates is likely to exceed the professional employment opportunities that the Saudi economy can create in the coming years.  As a result, the crisis of unemployment and underemployment among university-educated Saudi nationals may get worse.”

Saudi universities are now among top Arab universities, and as Hababi underlines, the number of universities “increased from 15 in 2005 to 34 in the first quarter of 2015. Enrolment in institutions of higher education has also risen from 604,000 in 2005 to approximately one and a half million in 2014. Furthermore, the government has increased its financial support for Saudi citizens who are interested in studying abroad”.

N. Habibi is suggesting that with the Recent trends in the Saudi labour market and reasonable projections about the job creation capacity of the economy in the coming years and the rapid increase in the number of university graduates, the KSA may experience “a continued surplus of graduates and a lack of suitable jobs for many”.

Even if the Saudi government maintain a high economic growth rate through strong government spending and business-oriented economic reforms, and is successful in the saudization of the workforce (the replacement of expatriate workers with Saudi nationals), Hababi wonders if the Saudi economy will “generate enough employment and self-employment opportunities for the army of qualified university graduates that will enter the labour market in the next few years?”

From his analysis, he foresees the share of Saudi employees with university degrees to rise from 31.7% in 2014 to 35% in 2022 and the college-educated Saudis with a four-year degree or more will increase by 125% from 1.55 million in 2014 to 3.29 million in 2022. The net annual increase in professional jobs for Saudis, which represents employment opportunities for university graduates, will be 162,000 in 2015 and will grow to 280,000 in 2022.

On the other hand, Habibi anticipates that university enrolment will gradually increase to 2.537 million students by 2022 and that the number of graduates per year will grow to 386,000 by 2022.

From this projections, Habibi anticipates a graduate that will “rise steadily to more than 100,000 by 2022″.  For him, ” These surplus graduates will either join the ranks of unemployed workers or will have to accept low-skilled jobs that do not require college degrees.

Saudi Arabia is already experiencing a high unemployment rate among its university graduates and this analysis indicates that conditions might not improve.  In 2014, the unemployment rate for Saudi nationals with high school or lesser educational levels was 9.5%, but for those with university degrees it was 15.5%.  This figure, however, masks a large gender gap that deserves notice: the unemployment rate for male university graduates in 2014 was only 3.9%, whereas females with university degrees suffered a 32% unemployment rate. This gender gap is likely to continue in the coming years.  Another factor that is likely to make the graduate surplus crisis even worse in the coming years is the large number of Saudi students who will finish their university education abroad and then return home in search of work opportunities.  If the Saudi government maintains the KASP (study abroad) programme at current levels of 130,000 to 150,000 students per year, we can expect an additional 20,000 to 30,000 university graduates with masters and PhD degrees to join the pool of domestic graduates every year.  These graduates enjoy better employment prospects than domestic graduates and they are more likely to capture some of the positions that would otherwise have been available to domestic university graduates. Overall, the commitment of the Saudi government to all levels of education, and particularly higher education, deserves  However, the focus on mass higher education and the generation of a large number of university graduates must be carefully examined. ”

 

 

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