Smuggling and Employment in Iran

The expansion of underground activities and smuggling of goods threats the employment in Iran. This study estimates the volume of smuggling in Iran by using multiple-cause-multiple causes (MIMIC) model and applying maximum likelihood method over the period 1979-2017. Then the effect of smuggling on employment is investigated by using ARDL Bounding test method. The results of smuggling time series show that despite some fluctuations, the smuggling has been generally increasing. The findings of regression model indicate that expansion of smuggling has a negative impact on employment in the short- and long-run.