Job Finding and Inflow to Unemployment: The Case of Iran

Malihe Hadadmoghadam (), Jafar Ebadi (), Mohammad Hossein Rahmati () and Mohammad Saeid Shadkar ()
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Malihe Hadadmoghadam : University of Tehran, Faculty of Economics
Jafar Ebadi : University of Tehran, Faculty of Economics
Mohammad Hossein Rahmati : Sharif University of Technology, Graduate School of Management and Economics
Mohammad Saeid Shadkar : University of Tehran, Faculty of Economics

Journal of Money and Economy, 2018, vol. 13, issue 4, 491-499

Abstract: In order to analyze the labor market through search and matching theory, we need deep parameters namely, rate of inflow to the unemployment pool and job-finding rate. In other words, these rates are primary parameters of matching function; hence, estimating these parameters is an essential step for the use of search and matching theory in every economy. In this paper, we estimate these rates of Iran’s economy using Simulated Method of Moments (SMM) as a baseline for future studies in this framework. We use the unemployment rate and the number of unemployed workers which were unemployed less than one month. We find estimates of around 0.1 and 0.32 for rate of inflow to unemployment and job-finding rate, respectively, which are lower than the amounts estimated for the United States and other developed countries. This is a sign of some labor market irregularities in Iran economy. For example, it shows that the probability of experiencing long-term unemployment/employment by unemployed/employed ones is high because of lower job-finding and inflow to unemployment rates.

Keywords: matching theory; labor market; unemployment; unemployment duration (search for similar items in EconPapers)
JEL-codes: C78 F16 J64 (search for similar items in EconPapers)
Date: 2018
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