Analyzing the Impact of Demographic Changes on the Iranian Labor Market: A CGE Analysis

Many countries all over the world will see widespread demographic changes in the decades to come. The demographic change will affect the economy and the labor market of these countries. In this paper we employ a multi-sector computable general equilibrium model to study the impacts of demographic change on the welfare, employment and activity level of economic sectors in Iran. The model includes seven economic sector and two types of labor-skilled and unskilled. We also considere the choice between leisure and work and labor mobility in the model. The model is calibrated based on the 2001 Micro consistent matrix. Results demonstrate that in the youth period, employment and activity level of sectors will increase. Furthermore, the increase in activity level will lead to an increase in income and welfare. When the population ages, on the other hand, welfare, employment and activity level of sectors will diminish.