Relationship between Real Exchange Rate and Manufacturing Employment in Iran  Economy (2001-2007)

Hadian, Ebrahim; Jafari, Mahbobe

doi:10.22096/esp.2013.26155

Relationship between Real Exchange Rate and Manufacturing Employment in Iran Economy (2001-2007)

Document Type : Original Article

Authors

Ebrahim Hadian ¹

Mahbobe Jafari ²

¹ Associate Professor of Economics, Shiraz University

² PhD student in Economics, Shiraz University

10.22096/esp.2013.26155

Abstract

By using panel, this paper investigates the relationship between real exchange rate and manufacturing employment (according to two- digits codes) in Iran economy over the period 2001-2007. An approach to this goal, export volume channel, the labor intensity and efficiency channels are notified. The results of this paper show that increase in real exchange rate induce to increase employment based on export volume and labor intensity channels. Furthermore, the estimation results of efficiency channel show that increase in openness of subsector of industry doesn't affect on manufacturing employment. But direct increase in real exchange rate causes to increase employment in manufacturing industry. By comparing, the estimation results of different channels seem that the increase of real exchange rate has ended to increase manufacturing employment in Iran economy during the period.

Keywords

Iran Economy

Real Exchange Rate and Employment

Panel Data

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