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An economic analysis of the impact of labor productivity on the dynamics of total wages in Iraq for the period 1994–2021

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  • Rafid F. Mohammed

Abstract

The study employed the Autoregressive Distributed Lag (ARDL) methodology to analyze the relationship between labor productivity and wages in Iraq from 1994 to 2021. The findings revealed a statistically weak relationship between productivity and wages, indicating that increases in productivity were not accompanied by significant wage growth. Long-term deviations (0.19) showed that changes in wages were not driven by changes in productivity, which was attributed to the influence of external legislative factors. The study highlighted that employers continued to hire workers at relatively low wages despite increased productivity, reflecting an imbalance between productivity and wages. It recommended revisiting labor laws and legislation related to workers’ rights and wages to achieve a balance between workers’ needs and employers’ requirements and to enhance the value of workers in the market by better aligning wages with productivity levels.

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  • Rafid F. Mohammed, 2025. "An economic analysis of the impact of labor productivity on the dynamics of total wages in Iraq for the period 1994–2021," Middle East Development Journal, Taylor & Francis Journals, vol. 17(1), pages 129-137, January.
  • Handle: RePEc:taf:rmdjxx:v:17:y:2025:i:1:p:129-137
    DOI: 10.1080/17938120.2025.2482633
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