Authors
Abstract
Increasing productivity, as a way to reduce the gap between supply and demand and also as a factor to reduc the production costs and to increase the efficiency of resources use and the quality and competitiveness of products, is considerable for economists and policymakers. On the other hand, the reduction of unemployment is another challenge facing the countries of the world too. But the ambiguity to achieve both goals simultaneously has been appeared in the recent theoretical and empirical studies. The main question in this study is whether productivity enhancing, causes reduction in Iran's indusrial employment? to address this question, a multivariate structural VAR model, including industrial labor productivity, employment and CPI for the 1973-2007 period has been applied and the data gathered from APO, statistic center and central bank of Iran. Estimation of structural model is based on Blanchard-Quah decomposition approach. The results show that promoting productivity policies have little role and importance in the employment variations, thereby its size in reducing employment in the long run is negligible.
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