An Evaluation of Oil-based Job Creation in Iran Using Input- Output Technique

This paper investigates whether the oil sector may have the potential for job creation in Iranian economy. Using the input-output technique as well as indices of forward and backward linkage in employment, the paper calculates job creation in oil sector compared to that of other economic sectors. This leads to an evaluation of oil sector as an intermediate among other sectors. As to the forward employment coefficient, the results reveal that sectors such as "crude oil and natural gas", "petroleum products" and "materials and chemical products" – the latter being one of the important sectors dependent to oil industry – all have lowest ranking among all sectors. Also, as to the backward employment coefficient, some sectors such as "crude oil and natural gas" as well as "petroleum products" ranked lowest. One concludes that investment in these sectors cannot provide the suitable path to development of employment in the country. This is explainable, mostly due to sell of crude oil (as opposed to processed products) as well as lack of development in forward sectors such as gasoline, gas oil and petrochemical Industries; altogether causing the absence of strong relations between oil and other economic activities in Iran.