Estimation of Labour Demand Function in Khuzestan Province

Estimation of demand function for labor is of great importance, for such estimation explains what determines the labor. The higher the unemployment rate, the greater the importance of the research. Since Khuzestan has been characterized by high unemployment rate, it can be conveniently chosen for case study. The Present research aims to estimate the demand for labor in Khuzestan and to analyze the determinants, using econometric methods. The period of the study is 1966-2001.The findings show that the demand for labor is affected directly by the stock of capital and the ratio of labor to capital, while employment affects, after a time lag, demand for labor inversely.