Estimation of employment intensity of Economic Growth in Iran's Industrial Sector by Different levels of Education

In recent decades Iranian labor education levels have been increased significantly which show growing level of human capital available for economic activities. So, providing employment opportunities for the growing number of young educated people is a challenge for Iranian policy makers. The main question is that how economic growth will increase demand for university graduated labor. Hence the aim of this paper is to estimate employment elasticity of economic growth in 22 manufacturing sub-sectors by education level. To do that we have run a panel data model by fully modified OLS method for 1995-2015. Our results show that in the long run, the higher the level of education, the lower the positive and significant impact of real value-added on level educated labor demand. So, the results showed that the existing pattern of industrial growth have no enough orientation to employ educated, knowledgeable people. Therefore, reforms should be adopted to lead more employment for higher-level educated people in Iran.