An Estimation of Labour Supply Function Using the Iranian Micro Data

Our objective in this paper is to estimate the labour supply function in Iran based on gender and area. We use the Iranian Statistical Centre micro data containing Socio-economic characteristics of households for the period 1992-1995. The estimation results indicate that labor income is the key variable affecting the allocation of time between work and leisure for both male and female. However, the elasticity of wage for female is higher than male. The Important difference between the female and the male behavior in the labour market is related to their level of education, which has negative effect on the male’s labour supply and positive effect on the female’s labour supply. Given the fact that the level of education among females in Iran is rapidly rising, females are expected to play a key role in the future labour market in Iran.