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Job Finding and Inflow to Unemployment: The Case of Iran

Author

Listed:
  • Hadadmoghadam , Malihe

    (University of Tehran, Faculty of Economics)

  • Ebadi , Jafar

    (University of Tehran, Faculty of Economics)

  • Rahmati , Mohammad Hossein

    (Sharif University of Technology, Graduate School of Management and Economics)

  • Shadkar , Mohammad Saeid

    (University of Tehran, Faculty of Economics)

Abstract

In order to analyze the labor market through search and matching theory, we need deep parameters namely, rate of inflow to the unemployment pool and job-finding rate. In other words, these rates are primary parameters of matching function; hence, estimating these parameters is an essential step for the use of search and matching theory in every economy. In this paper, we estimate these rates of Iran’s economy using Simulated Method of Moments (SMM) as a baseline for future studies in this framework. We use the unemployment rate and the number of unemployed workers which were unemployed less than one month. We find estimates of around 0.1 and 0.32 for rate of inflow to unemployment and job-finding rate, respectively, which are lower than the amounts estimated for the United States and other developed countries. This is a sign of some labor market irregularities in Iran economy. For example, it shows that the probability of experiencing long-term unemployment/employment by unemployed/employed ones is high because of lower job-finding and inflow to unemployment rates.

Suggested Citation

  • Hadadmoghadam , Malihe & Ebadi , Jafar & Rahmati , Mohammad Hossein & Shadkar , Mohammad Saeid, 2018. "Job Finding and Inflow to Unemployment: The Case of Iran," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 13(4), pages 491-499, October.
    • Handle: RePEc:mbr:jmonec:v:13:y:2018:i:4:p:491-499
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    References listed on IDEAS

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    More about this item

    Keywords

    matching theory; labor market; unemployment; unemployment duration;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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