Determinants of the Labor Force Emigration in Iran

The relationship between international trade and emigration is being concerned in most developing countries with their relevant migration and trade policies. Such policies should rely on logical resolutions in order to reduce unemployment pressure on the labor market. Hence, this study examines the relationship between Iran’s trade volume and labor force emigration to the five major members of the OECD (the US, Canada, the UK, the Netherlands and Sweden) over the period 1992-2004 (1371-1383).Following Mitchell and Pain (2003) and Mayda (2005), a specified gravity model is estimated by panel data to show the impacts of determinants on the Iran’s emigration. The empirical results obtained indicate that there is a significant and complementary relationship between trade volume and the labor force emigration to the selected countries of OECD in Iran. Additionally, the results show that convergence in the labor force productivity, as a gap between the number of skilled labors falls in Iran and the OECD members, can lead to a decrease in emigration from Iran to abroad.