A Study of the Effect of Labor Force Productivity on Unemployment in Iran

Unemployment is classified as one of the most serious obstacles to economic and social progress. So to avoid the negative effects of unemployment, reducing the rate of unemployment should be considered as one of the leading development goals in developing countries. One characteristic of developing countries is the low rate of productivity growth, and the increase in productivity is the result of reducing the use of resources, reducing costs, using better methods of production or improving the ability of production factors, especially the labor-force. So, the Objective of this research is to study the effect of productivity of labor-force on unemployment in Iran from 1978 to 2010. For the theoretical analysis of the topic, ordinary least squares method was used, and the data were collected by the annual time series coefficients data. The research results of this method indicate that the impact of all variable coefficients has been expected based on the theoretical frame work, the coefficients for all variables are significant, and productivity of labor has a negative effect on unemployment.