The employment situation in Saudi Arabia and the dynamics of the labor market are the results of a series of decisions to grow the economy fast after the discovery of oil. Since the locals were not equipped and prepared with the required knowledge and expertise, to build up the nascent economy at rapid speed during that phase, there was a massive inflow of expatriates. The current research highlights the changing labor market in Saudi Arabia, unemployment among locals, remedial policies framed by the government, their drawbacks, and effect on the overall economy. The key antecedents are the preference of Saudi youth for the Public sector, unemployment, the role of the Education System, the private sector, the Nitaqat (job localization) system and expatriate factor. Finally, I propose a viable human capital development model that suggests a collaborative role for expatriates and employability enhancement programs for sustainable economic and social development.
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