Estimation of Iran's Industrial Sector for Employment Demand

Identifying the factors affecting job demand is one of the most important issues in the Iranian economy. The industry sector is one of the sectors which is very important in the process of job creation and its growth. The purpose of this paper is to analyze the factors affecting employment demand in the industry by dividing the two-digit ISIC codes by 10 employees and the period 1996-2015 using a panel data approach and Generalize Method of Moments (GMM) and Fully Modified Least Squares Method (FMOLS) estimators. The results show that the elasticity of employment demand to wages is -0.15 to -0.14, production is from 0.46 to 0.48 and the capital stock is from 0.08 to 0.13. The largest share of employment is in the coke, oil, and nuclear fuel industries, respectively.