The Effect of Afghan Immigrants on Unemployment Rate in the Economy of Iran

Iran is one of the most concentrated areas of Afghan migrants and refugees. Most Afghans live outside camps dispersed throughout the country mixed with Iranian households. The majority of Afghan immigrants are typically unskilled and illegal workers. They expect lower wages than their Iranian counterparts and are ready to work in troublous conditions. Therefore, they can compete with Iranian unskilled workers. This study makes an attempt to investigate the impacts of Afghan immigrants on the unemployment rate in the economy of Iran, through time series data analysis and estimating regression equations using Ordinary Least Square (OLS) method. The results indicate that during the period under study (1976-2006), Afghan immigrants led to and increase in the unemployment rate in the economy of Iran. In fact, Iranian workers have been replaced by Afghan workers.