pseudo -panel data method

This study examines how socioeconomic and demographic factors influence labor force participation (LFP) in Iran. Data from the Iranian Household Income and Expenditure Survey applied the pseudo-panel data method used. The logit model estimations show that there is an inverted U-shaped relationship between age and the probability of LFP, with higher chances of entering the labor market at younger than at middle or old ages. Marital status also affects LFP, with respectively never-married and divorced people more likely to participate in the labor market than married people. Being a student reduces the likelihood of LFP while having a larger household size and a higher level of education increases it. Being the head of the household increases the probability of LFP by 39%. Demographic trends in Iran, such as the high proportion of young adults (25-44 years old) who want to join the labor force, the large number of young people in higher education, and the rising rates of divorce and singlehood, suggest that the economic participation rate will increase shortly. Therefore, this important issue should be considered in the macro-policy.