Analyzing Labor Productivity in Iranian Mines

Mining is impossible without employing labor. The production and extraction of minerals require a combination of labor, machinery and energy. In this paper, through a review of the stylized facts of the Iranian mines under operation, first the factors affecting labor productivity are identified, and then, by specifying an econometric model, their effects on productivity are estimated over the period 1983-2017. Given the non-stationary variables, the Johansen-Juselius co-integration test confirms the existence of a long-term relationship among the variables. Accordingly, the share of skilled labor, private ownership of mines, capital-labour ratio, and wages and salaries positively influence labor productivity. According to the findings, designing a payment and reward system related to the added value of employees, using labor-saving technologies (advanced mining equipment) in the extraction of deep and high-risk mines, privatization of non-strategic mines, increasing the share of the labour force in the profit and sale of minerals, paying attention to the substitution and complement inputs (labor, energy and capital) in mineral extraction and processing are recommended to increase labor productivity in mines.