This study delves into the multifaceted issue of youth unemployment in the countries of the Gulf Cooperation Council (GCC), where it is nearly twice as high as the average unemployment rate in the region. Given that, a significant proportion of the population in these countries comprises of youth; this problem poses a significant obstacle to the development of a knowledge-based economy. Furthermore, the lack of youth participation in the labor market has become a pressing issue, thwarting national and United Nations’ sustainable development goals (SDG) related to decent work which strives to ensure workers are getting fair treatment and pay. The study reveals that youth in the GCC are underutilized, with they being five times more likely to be unemployed compared to adults. The problem is particularly acute among females. This paper outlines the limitations of nationalization policies aimed at increasing youth labor participation and provides policy recommendations that take into account the diverse perspectives of different stakeholders and the varying situations in different countries.