Causality Relationship between Educated Labor and Total Factor Productivity Growth in Iran's Agricultural Sector

The aim of this study was to investigate the causality relationship between agricultural educated labor and total factor productivity growth in Iran’s Agricultural Sector. The statistic of population was the educated labors in Iran’s Agricultural Sector during the period of 1981-2013. Using Johansen-Juselius co-integration test, the relationship between educated labor and total factor productivity growth in Iran’s agricultural sector was examined. Also, to examine causal relationship between educated labor and total factor productivity growth, Granger Causality test was applied. The results of Johansen-Juselius co-integration test showed that there is a positive long run co-integration relationship between the mentioned variables. Also, based on the Granger Causality test was confirmed relationship between educated labor and total factor productivity growth in the Iranʼs Agricultural Sector. Vector error correction model results indicated significant effect of educated labor on total factor productivity growth in short run. So, educated labor, by increasing productivity growth, leads to increasing production and development of the Agricultural Sector. Therefore, policy and planning in the field of education and labor guidance and transfering their information and knowledge to farmers is recommended.