An Investigation of Factors and Policies Affecting Labor Force Employment in Iranian Economy

The aim of this paper is to study the factors and policies that affect employment in Iranian economy. To accomplish this purpose, ARDL dynamic model is applied to annual data during 1974-2007. By this method, the labor force demand in Iranian economy is estimated. The results show that in the short-run, employment can increase by using the banking facilities and stimulating production. It is shown that in the long-run, the most important factor that can result in job creation is investment and the reason is that investment leads to economic growth and in this paper, it can be the leading factor of job creation. The size of the coefficients corresponding to employment in previous periods indicate low flexibility of labor market In Iranian economy and it is required to use proper policies and solutions to increase labor market flexibility in Iranian economy.