The Dynamics of Unemployment by Territory, Gender, and Age Groups in Iran

Abstract

High level of unemployment persistence is important for Iran’s policy makers not only because of its weakening impacts on the whole economy, but also due to its social, political, and cultural consequences for the government stability. This paper tests the dynamics and hysteresis of the Iran’s unemployment rate disaggregated by territory (urban and rural), gender (male and female), and age groups (19-24, 25-30, 30 and more) covering the period 2001Q2-2020Q1. In all cases, our findings mostly support the hysteresis in unemployment and so shocks have a persistence effect on the unemployment subgroup series. When we extended the analysis to allow for two structural breaks with the GARCH unit root tests, this conclusion remains unaltered. The foregoing findings can help policymakers in each subgroup to design national and regional policies.