Nexus of Women’s Empowerment and Economic Growth in Saudi Arabia

Saudi Arabia is actively boosting women’s labor force participation, exceeding 2022 targets to enhance human capital. The purpose of this study is to examine the nexus between women’s empowerment and economic growth using secondary data from 1997 to 2022. Empowerment was proxied by Saudi women employed in government, with Gross Domestic Product (GDP) and female B.Sc. holders used as explanatory variables. The result of the Johansen test depicts a long-run equilibrium relationship between these variables. The Vector Error Correction Model (VECM) revealed a significant negative short-term impact of GDP on women’s empowerment at the 5% level, while female graduates had a positive short-term effect. The model results indicated rapid adjustment, correcting about 71% of disequilibrium per period towards long-run equilibrium. Importantly, a significant positive long-run relationship exists between women’s empowerment and economic growth. Diagnostic tests confirmed the VECM’s reliability, reflected by normally distributed residuals, with no significant autocorrelation, and overall model stability. The study findings contribute valuable insights for policymakers and stakeholders striving to achieve gender equity and sustainable economic development. Moreover, qualitative methods could be employed in future research to enhance the comprehensive understanding of the cultural and social barriers to maximize the long-run virtuous cycle of empowerment and economic growth.