The Estimation and Analysis of Demand for Labour in Khuzestan's Manufacturing

This paper deals with estimation and analysis of demand for labour in Khuzestan's manufacturing. First, we estimate the stock of capital applying exponential trend method. Employing Johansen’s approach, the research investigates the long-run effect of significant determinants on demand for labour in Khuzestan’s manufacturing for the period 1966-2002. The findings indicate that in the long run, stock of capital and productivity of capital affect positively the demand for labour, while the average capital has negative effect. The result also shows that the error correction term is negative and less than one (-0.95) indicating that the speed of adjustment toward equilibrium in response to deviations from the long-run equilibrium is very high.