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Employment effects of economic sanctions in Iran

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  • Moghaddasi Kelishomi, Ali
  • Nisticò, Roberto

Abstract

This paper investigates the effect of economic sanctions on employment. We exploit the imposition of a series of unexpected and unprecedented international economic sanctions on Iran in 2012 and estimate the short-run effects of the change in import exposure on manufacturing employment at the industry level. Our estimates indicate that the sanctions led to an overall decline in the manufacturing employment growth rate by 16.4 percentage points. However, we uncover significant asymmetric effects across industries with different ex-ante import shares. Interestingly, the effects are mostly driven by labor-intensive industries and industries that heavily depend on imported inputs. This suggests that the overall negative impact of the sanctions on employment might be largely due to the decline in productivity experienced by industries with a high propensity to import inputs from abroad.

Suggested Citation

  • Moghaddasi Kelishomi, Ali & Nisticò, Roberto, 2022. "Employment effects of economic sanctions in Iran," World Development, Elsevier, vol. 151(C).
    • Handle: RePEc:eee:wdevel:v:151:y:2022:i:c:s0305750x21003752
    DOI: 10.1016/j.worlddev.2021.105760
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    Cited by:

    1. Kelishomi, Ali Moghaddasi & Nisticò, Roberto, 2024. "Economic sanctions and informal employment," Labour Economics, Elsevier, vol. 89(C).
    2. Hossein Tarighi & Grzegorz Zimon & Mohammad Javad Sheikh & Mohammad Sayrani, 2024. "The Impact of Firm Risk and the COVID-19 Crisis on Working Capital Management Strategies: Evidence from a Market Affected by Economic Uncertainty," Risks, MDPI, vol. 12(4), pages 1-33, April.
    3. Javad Nosratabadi, 2023. "The effect of trade sanctions on employment through total factor productivity," International Economics and Economic Policy, Springer, vol. 20(1), pages 163-187, February.
    4. Latukha, Marina & Alon, Ilan & Kuleshov, Nikita & Vaiman, Vlad, 2024. "The effect of sanctions on macro talent management: The case of Russia," Journal of World Business, Elsevier, vol. 59(5).
    5. Di Maio, Michele & Leone Sciabolazza, Valerio, 2023. "Conflict exposure and labour market outcomes: Evidence from longitudinal data for the Gaza Strip," Labour Economics, Elsevier, vol. 85(C).
    6. Vincenzo Bove & Jessica Di Salvatore & Roberto Nisticò, 2023. "Economic Sanctions and Trade Flows in the Neighborhood," Journal of Law and Economics, University of Chicago Press, vol. 66(4), pages 671-697.
    7. Zubarevich, N., 2022. "Regions of Russia in the new economic realities," Journal of the New Economic Association, New Economic Association, vol. 55(3), pages 226-234.
    8. Fatemeh Rahimzadeh & Hamed Pirpour & Bahman P. Ebrahimi, 2022. "The impact of economic sanctions on the efficiency of bilateral energy exports: the case of Iran," SN Business & Economics, Springer, vol. 2(9), pages 1-18, September.

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    More about this item

    Keywords

    Economic sanctions; Employment; Import exposure; Labor reallocation;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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