The Nexus Between Demographic Factors and Economic Development in the Kingdom of Saudi Arabia

Abstract

Demographic factors significantly shape economic development, especially in rapidly transitioning nations like Saudi Arabia. This research explores how demographic dynamics such as population growth, education, health, and employment impact Saudi Arabia's economic development. This analysis of the demographic factors and economic growth model for Saudi Arabia using annual time series observations from 2000 to 2023 utilizes new methods such as the ARDL and co-integration techniques; the study brings new perspectives on the dynamic causal connections between measures of population growth, education and health, and workforce development that are paramount for Vision 2030 economic planning. Also, this research uniquely examines the impact of gender workforce participation and access to new technologies on Saudi Arabia's demographic characteristics and economic development. It aims to uncover how modern societal and technological trends influence economic evolution and support Vision 2030's diversification and sustainable development goals. Results reveal that the Human Development Index HDI, Female participation in the total labour force FPTL, and Internet penetration rate IPR which is a proxy variable of technological advancement, significantly and positively influence economic growth and development, underscoring the importance of human development, gender inclusion, and digital connectivity. Conversely, the unemployment rate shows a marginally significant relationship with GDP. Policymakers should understand the role of demographics as vital for economic development planning and enhancing human development, promoting gender equity, and improving digital infrastructure for sustainable economic growth.