Measurement and Trend Analysis of Productivity in Irans Various Economic Sectors

This paper tries to measure and analyze the trend of indicators of labor and capital productivity as well as Total Factor Productivity (TFP) in the economic sectors introduced in the 4th five-year-development plan for the period within 1971-2003. According to the results, the productivity indicator throughout Iran has increased 0/9% on average annually and the highest growth has been in the telecommunication sector whereas the greatest decrease is related to the commerce-restaurants-hotels sector. The capital productivity indicator in the period in the aggregate level economy has decreased 5% on average per year while the largest growth has been in the commerce-restaurants-hotels sector. Contrary to improvements in the indicators of human capital and technology indicators, TFP indicator has increased during the period 0.04% on average annually which in turn is not indicative of optimum economic achievements in the area of utilizing resources. The results of the study shows that the best sector from the viewpoint of optimum use of the resources has been the telecommunication sector and the poorest one is that of the commerce-restaurants-hotels sector. The share of TFP in the growth of production in industry, construction, telecommunication, water and electricity power sectors as well as that of services offered by the institutions of financial, monetary, insurance, estate, vocational-specialized, transporting and warehousing affairs has been in the range between 10% and 84% out of which the least is the share of industry sector and the greatest is that of telecommunication. TFP has been negative in other sectors. It indicates that their performance has been poor in making optimum use of resources. The extent of urgency to review the previous policies and make new policies to meet the goals of improving productivity in the economic sectors.