INVESTIGATING THE EFFECT OF DUTCH DISEASE ON THE PROCESS OF EMPLOYMENT IN IRAN

The significance of oil incomes in the economy of Iran is an undeniable issue. Not only has the oil sector as one of the important economic activities influenced other economic variables, but also incomes earned from this sector as an important financial resources in Iranian economy has significant role. In this line, the Dutch Disease as an economic concept tries to explain the relationship between excessive utilization of natural resources and recession in the industry. The present study is to investigate the effect of the Dutch Disease on the process of employment in Iran during 1973 to 2013 using Johansson-Joselius method. The results of the present study indicate that there is a reverse correlation between the increase in oil incomes (as a sign of the Dutch Disease) and employment in Iran. In fact, in the first period, the highest variations of employment was due to variations related to the variable itself. But, in the next periods, employment depends on variations of the variable of employment itself, real GDP, Variable of the tradable sector to the non-exchangeable one and the variable of oil price.

Dutch Disease, Oil Price, Employment