The unemployment–labor force participation linkage in Iran’s women labor market

Iman Cheratian, Saleh Goltabar and Carla Calá

International Journal of Development Issues, 2022, vol. 21, issue 2, 218-236

Abstract: Purpose - During recent years, the long-run relationship between the unemployment rate (UR) and the labor force participation (LFP) rate has been examined in-depth in developed and developing economies. This paper aims to explore this relationship for Iranian women in 31 provinces from 2005Q2 to 2019Q1. Design/methodology/approach - To examine the existence of a long-run relationship between female LFP and UR, the time-series cointegration approach has been used. Furthermore, regarding the low power of the univariate cointegration approach, the authors consider a panel version of the cointegration tests developed by Westerlund. Findings - Both time-series cointegration tests and panel cointegration test support the unemployment invariance hypothesis for most Iranian provinces, especially the most religious ones. As it implies an invariance to supply side policies, it seems that reducing legal and cultural barriers could be more relevant to decrease female UR and increase LFP than training programs or R&D policies. The present results also suggest that, for this group of regions, a more centralized policy design could be appropriate, instead of a regional one. Originality/value - This study investigates whether the unemployment invariance hypothesis holds for Iran, which has not been analyzed before for the Iranian labor market. Moreover, the study adopts a regional approach, which takes into account the huge regional differences in Iran.

Keywords: Unemployment; Labor force participation; Unemployment invariance hypothesis; Cointegration; Women; Iran; E24; J21; J64 (search for similar items in EconPapers)
Date: 2022
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Working Paper: The unemployment-labor force participation linkage in Iran's women labor market (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijdipp:ijdi-11-2021-0228

DOI: 10.1108/IJDI-11-2021-0228

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