Unemployment Conundrum in Iran
AbstractThis paper examines the major causes of Iran’s unemployment conundrum using a simultaneous-equation model and annual time series data from 1968 to 2000. It is found that the rate of unemployment responds positively to output gap and increasing economic uncertainty and negatively to the higher growth rates of real investment and inflation, supporting the view that there exists a degree of trade-off between inflation and unemployment. However, since persistent and soaring inflation rates eventually lead to the chronic depreciation of the domestic currency and rising economic instability, it will be irrational to exploit this trade-off to fight against unemployment, particularly in the post-1979 revolution. Iran possesses one of the youngest populations in the world with approximately 40 per cent of its population less than 15 years. It is thus argued that if major tax and constitutional reforms are not undertaken, unemployment will continue to rise, depicting a sombre future for the next working age generation.
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Bibliographic InfoPaper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp06-15.
Length: 11 pages
Date of creation: 2006
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-08-26 (All new papers)
- NEP-CWA-2006-08-26 (Central & Western Asia)
- NEP-MAC-2006-08-26 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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