The Effect of Industrial Concentration and Educational Inequalities on Labor Productivity of Iranian Industrial Units

Industrial concentration, which is one of the structural characteristics of the business sector, refers to the way of market distribution between different manufacturing industrial. Hence, this study examines the impact of industries’geographic concentration and Gini coefficient of education (as an educational quality indicator) on  labor productivity of  industry sector, over the period 2000-2011, using provincial data and dynamic panel data. First, the desired indicators are calculated and analyzed their growth rate. Also, provinces have been ranked by industry concentration degree and educational gaps. Finally, econometric model has been estimated using Arellano-Bound method. The results show that per capita wage of labor force has the most impact on improving productivity of the industry sector’s  labor. Also, industrial concentration degree has a significant and positive relationship with the dependent variable. The Gini coefficient of education has a significant and negative relationship with labor productivity, is indicating the necessity to apply a policy for reducing dispersion of the level of labor force education in order to improve the productivity.