Minimum wage and industrial employment in Iran

Knowing how the minimum wage affects employment can be helpful in formulating policies and programs related to different economic sectors. For this reason, many studies have been conducted on how the minimum wage affects employment. Due to the decrease in employment in the industrial sector in recent years and the formation of the phenomenon of growth without employment, the present study examines the minimum wage and industrial employment in Iran by durable, intermediate and capital consumer industries using two-digit ISIC code data for Provinces and in the period ۱۳۸۱-۱۳۹۴.Findings show that the minimum nominal wage, production costs and production fluctuations are important factors affecting the employment of the industrial sector. The minimum wage has a positive effect on employment. Therefore, determining the minimum wage based on the type of economic activity can have a positive effect on employment and reduce its fluctuations.

Keywords:

minimum wage , employment , nondurable goods , capital goods , intermediate goods