The Analysis of the Impacts of Oil Revenues Redaction on Employment in Iran: A CGE Approach

Document Type : Original Article


1 Department of Economics, The Faculty of Islamic Studies and Economics Imam Sadiq University

2 PhD Student in Economics, Faculty of Economics and Political Sciences, Shahid Beheshti University


Since Iranian government’s budget is depends to oil revenues, it is expected that oil price fall affect all markets especially labor market in Iran. In this paper, we analyze the effects of oil revenue fall on skilled and unskilled labor employment, using a multi sector computable general equilibrium model. The results are investigated based on 2011 Micro Consistent Matrix. Based on the findings of this paper, oil revenue decrease affect activity level and employment of labor in sectors differently, such that the activity level of all sectors and the unskilled labor employment in all sectors will decrease. The skilled labor employment, on the other hand, will fall in “services” sector, while it will increase in all other sectors. Moreover, the results reveal a substitution of skilled labor to unskilled labor in all sectors after falling oil revenue.    


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