Comparative Evaluation of the Effects of Policies Instruments on Employment and Labor Demand in Iranian Economic Sectors Based on Disequilibrium Approach

This paper is to investigate the role of affecting variables on employment and labor demand in Iran economic sectors. Dynamic labor demand models in the framework of disequilibrium in labor market have been estimated by cointegration approach. Estimating the dynamic model of labor demand shows that among the variables affecting labor demand, production, exports and wage index are the most effective determinants of labor demand in the economic sectors. This is while the investment, despite the policymakers' attention to that, did not meet the expectations that it has strengthened and developed employment. Findings also clarify the different importance of variables effect on labor demand in different sectors. The most effective determinants of labor demand in the industry and mine sector are respectively production, interest rate, exports and wage index. In agricultural sector the highest effect is respectively belonged to wage, production and exports. Production, wage and exports have respectively the greatest effect on labor demand in the services sectors.