Saturday, January 14, 2012

Has Iran's Economy Lost One Million Jobs?

Ebrahim Alizadeh in a report for Jahan Sana'at daily in Tehran has written that in the past year one million job has been lost in Iran. His report prompted me to check the original report from Statistical Center of Iran (SCI).  The latest report which covers Iranian calendar year of 1389, from March 2010 to March 2011, includes a summary statistics for Iran:

  • Iran labor force for 10 years and older population in this year has been 23,875,023 with a participation rate of %38.3 (men's participation rate at %62.1 and women's participation rate at 14.1%). (Ref. Table 1 of the report).  The participation rate has declined %0.6 since its previous year where it stood at %38.9. 
  • In 1388 (March 2009 to March 2010) SCI reported that 21,000,079 were employed in agriculture, service and industrial sectors, in the following year this number is 20,656,621. This means 343,458 jobs lost on a year to year basis. 
  • Looking at seasonal data however we see in the winter of 2010 the number of unemployed rises to 3,420,836 with labor force falling to 23,367,266. This means a total employment of  19,946,430. This means a loss of 1,053,646 jobs. In this I believe we have to take into account that winter does reduce activities in agriculture and construction. This could be the effect of the season. However still 343,458 is a rather large number. 
Unemployment has increase also by 1.6 percent from %11.9 in 1388 to %13.5 in 1389. Given that the participation rate is falling I believe that we are witnessing a discouraged workers' effect taking place in Iran. Thus I agree with Jahan Sana'at conclusion that the government claim of success in combating unemployment is actually a misconception. The data shows the supply of labor has been falling and not its demand.

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