Document Type : Research Paper
Authors
1 PhD Student, Institute for Management and Planning Studies, Tehran, Iran
2 Assistant Professor, Economy Faculty, University of Tehran , Tehran, Iran
3 PhD in Economics, Institute for Management and Planning Studies, Tehran, Iran
4 Professor, University of Tehran, Tehran, Iran
Abstract
In this study, Iranian labor market shocks are analyzed using seasonal data from 2009 to 2022 by using the Bayesian sign-restriction method in the form of an SVAR model for supply and demand shocks. The effect of monetary policies on each of these shocks is estimated in the entire economy and its different sectors, i.e. industry, service, and agriculture. Also, the real exchange rate variable is used as a control variable. The results indicate different effects of monetary policy shocks on both supply and demand sides. Increasing the money supply in the industrial sector has a positive effect on labor demand, while it has a negative effect in the agricultural and service sectors. The results indicate that reducing interest rate has a greater effect on increasing employment in industrial enterprises in comparison to other sectors. In contrast, the inflationary effect in the agriculture and service sectors is dominant on the labor demand side. On the labor supply side, the negative effect of monetary shocks in the agriculture sector was observed unlike other sectors. This is due to low wages in this sector and indicates that workers are not motivated to increase working hours and are willing to change their jobs in inflationary shocks.
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