New research reveals that unemployment in Iran has fallen slightly, and yet the reality is that one-fifth of young Iranians are unable to find work, and that job prospects for educated Iranians and women have not improved.
The new report, published by the government’s Statistical Center of Iran on October 8, has found that the rate of unemployment in Iran has fallen to around 10.5 percent in summer 2019 [Persian PDF], an unemployment rate 1.8 percent less than the rate of unemployment for summer 2018, which was 12.3 percent for Iran’s population over the age of 15.
Unemployment has been one of the biggest problems faced by successive Iranian governments. Although it is an enduring problem — Mahmoud Ahmadinejad’s administration struggled to come up with solutions, just as the administration of Hassan Rouhani does currently — the growing number of protests across Iran about the lack of jobs as well as poor working conditions has put the issue at the center of public debate.
According to the report, the current unemployment rate is 1.8 percent less than the rate of unemployment for summer 2018, which the Statistical Center reported was 12.3 percent for Iran’s population over the age of 15.
1. A Summary of Data
An Uneven Landscape
According to the statistics gathered by the center, in summer 2019, the unemployed population fell to 2.894 million, 455,000 less than the same period in 2018. At the same time, the report shows that the rate of unemployment among young Iranians between 15 and 24 has remained over 25 percent (26.1 percent, to be exact), meaning that a quarter of young people seeking employment have not succeeded in securing even part-time jobs. Instead, the rate of unemployment for those between 18 and 35 has fallen from around 20 percent in summer 2018 to approximately 18 percent for the same period in 2019.
This might show a relative improvement in the employment rate for young Iranians, but it also demonstrates the bleak fact that the chances of finding a job for young Iranians is at best one in five. In other words, one-fifth of young Iranian looking for jobs return empty-handed from the job market.
According to the report, the number of employed in Iran's population has increased by around 844,000 compared to the same period last year and, for the first time in Iranian history, it has exceeded 24.75 million. But only 15.321 million of this number have full-time jobs and the remaining 8.417 million work part-time. At least 2.17 million of those who work part-time have been forced to accept part-time jobs, even though they had been actively seeking full-time employment. These individuals, who account for around nine percent of the employed population, are categorized as people with “incomplete employment.” In addition, approximately one million people are classified as “temporarily absent,” meaning that they were absent from their jobs when the data was being collected.
According to these statistics, Iran’s “active population” — adding together both the employed and unemployed — has reached 27.645 million. This is less than 45 percent of the total population over 15 years of age. The rest, 33.937 million, is considered to be the “inactive population,” meaning that they are absent from the job market. Details of summer 2019’s employment data have not yet been published but previous data from spring 2019 reveals that 62 percent of the inactive population are homemakers, 16 percent are students, 15 percent earn an income without working and seven percent fall into other categories.
No Bonanza for Educated Iranians
Although employment statistics for the recent summer show a relative improvement over the previous summer, for educated Iranians, nothing has changed. The Statistical Center of Iran report shows that the majority of new jobs have gone to people without a university education and the numerous graduates from Iranian higher education institutions have not benefited much. In fact, 44 percent of unemployed Iranians are graduates, whereas in summer 2018, they made up 40 percent of the total unemployed. Educated Iranians make up less than 25 percent of Iran’s total employed population — meaning that only one-fourth of the workforce in employment has a university education.
Women Hired in Only 11 Percent of New Jobs
The employment situation for women has not changed much, either. Women’s economic participation rate has actually fallen compared to summer 2018, dropping to 17.6 percent. From a population of around 30.780 million women over the age of 15, only 5.406 million are in the job market, but only 4.419 million of them have succeeded in finding a job. In the span of one year, the net gain in jobs for women was just 93,000, around 11 percent of the total number of new jobs created. This means that close to 90 percent of new job opportunities have gone to men, and the situation has not improved in any substantial way for women.
The new research also looks at the breakdown of employment by Iran’s economic sectors. Agriculture jobs made up 19 percent of the employment market, 0.1 percent higher than the previous summer. The industrial sector made up 32 percent and the service sector 49.1 percent, a 0.4 percent drop compared to summer 2018.
Job creation was most prevalent in industry, with the net gain of new jobs in the sector at 368,000. The service sector created 303,000 new jobs and the agricultural sector added 170,000 jobs.
2. Common Questions
Why did the Statistical Center Look at a Higher Working Age?
The Statistical Center of Iran has announced that for its reporting purposes for summer 2019, it has looked at a minimum working age of 15, whereas before it based its employment statistics on people working aged 10 and up [Persian link]. The Statistical Center bases its research and statistics on the standards of the International Labor Organization (ILO), but the ILO has not set specific age standards for employment statistics, so countries set their own working ages based on the domestic situation and that country’s laws and regulations.
The center's decision to assess people 15 years and older takes into consideration the social, cultural and economic developments and assessments made by several other countries. In addition, Article 79 of the Iranian Labor Code states: “It is prohibited to employ any person under 15 years of age.” And Article 84 sets the minimum working age for certain jobs at 18 “at the discretion of the Ministry of Labor and Social Affairs.”
So the Statistical Center of Iran appears to be trying to make its statistics conform to the reality of employment in Iran. In recent years it has reported employment figures for people over the age of 15 separately, and this report provides separate employment figures for people aged 10 and up. The center has promised to follow this practice in future reports.
But Does Raising the Working Age Change the Statistics?
Changing the working age does change the indicator for the rate of economic participation and the ratio of employment, but it does not have much impact on the unemployment rate. The rate of economic participation and the ratio of employment are the results, respectively, of dividing the active (ready for work) population and the employed population by the total working-age population. So removing the population aged between 10 and 15 increases the rate of economic participation. But to determine the unemployment figure, the center divides the unemployed population by the active population, and this does not change by excluding the population aged between 10 and 15. As a result, the rate of unemployment does not change noticeably either and remains relatively stable.
As a result of changing the working age in the employment statistics for summer 2019, the rate of economic participation has increased by 4.1 percent. The ratio of employment has also changed by 3.7 percent, which is a considerable change, but the rate of unemployment has only changed by 0.1 percent.
Why has the Unemployment Rate Fallen?
Changing the working age has definitely not played a role in reducing the rate of unemployment, so it is necessary to consider other reasons behind the shift in numbers. Some experts believe that the drop in the unemployment rate for summer 2019 is the result of a relative boom in seasonal jobs. For instance, the increase in precipitation has given a relative boost to agriculture, creating more seasonal jobs in this sector.
But, in addition to this, the net employment statistics in the industrial sector are also noteworthy. The rate of economic growth for spring and summer 2019 has yet to be published, but it appears that the industrial sector is still in recession. It is important to note how jobs in the oil sector are performing in the current economic slump. Jobs in the sector are relatively safe since it is a government monopoly, so the recession in this sector does not have a noticeable effect on the employment rate.
In the last six months, however, considerable efforts have been made to revive dormant industrial production units. Most of these efforts are focused on resolving ownership issues, injecting liquidity and temporarily resolving the crisis of the debt these units owe to the banking system. These efforts have indeed improved the job market in the industrial sector, for the moment, but considering the economic and political instability, there is no guarantee that it will continue to do so.
On the other hand, the service sector, which controls approximately half of the job market, does not show any improvement. Indeed, as the statistics show, the rate of unemployment in this sector has increased by 0.1 percent compared to the year before.
How are Employment Statistics Calculated?
According to Ali Akbar Mahzoon, Director General of the Statistical Center’s Office for Population, Workforce and Census, one percent of Iranian households are polled in order to arrive at employment figures [Persian link]. Each household is asked 50 questions and, after an 18-step process, the results are published as statistics regarding the workforce.
The reliability of this method for gathering statistics is 95 percent — that is, it has a five percent margin of error — meaning that the real rate of employment is somewhere between 10 to 10.9 percent.
Are Employment Statistics in Iran Reliable?
Generally, the Statistical Center tends to not publish details and raw data about Iran’s workforce. However, the center appears to be using the same methods and standards for determining statistics as other countries.
Of course, the possibility for errors — or even intentional manipulation of data — in the short term exists. However, in large and systematic projects to gather statistics, such errors or manipulations will reveal themselves as contradictions in the results.
Likewise, manipulating employment statistics to mislead international institutions does not serve any purpose. Compared to other developed and underdeveloped countries, the current existing statistics are disappointing enough, so it is unlikely that they have been manipulated to look better. And yet manipulating the statistics for short-term domestic consumption is not out of the question. The Statistical Center’s lack of political independence has always made it a target for accusations that it manipulates data to benefit various administrations. This reality makes it a little more difficult to steadfastly defend the statistics it publishes.
On the other hand, these employment statistics can be compared to other economic indicators, especially the rate of economic growth, to evaluate their credibility. It is for this reason that a drop in the rate of unemployment during an economic recession seems a little suspicious. But it is also true that in such a comparison between sets of statistics, it is important to carefully investigate the details of economic recession or growth and take into account the particulars of economic developments.
In any case, although one cannot judge the validity of the Statistical Center’s employment figures with absolute certainty, for the moment there is no reason to doubt them, and they appear to be reliable as credible facts.
A Bleak Future for Iran's Job Market, May 3, 2019
Can Iran Survive Record Inflation?, February 25, 2019
Iran’s Unemployment Crisis: Only 11 Million Full-time Jobs, January 23, 2019
Could a 20% Salary Increase Help State Employees?, December 5, 2018
Iran Rushing Toward 30 Percent Inflation, November 27, 2018
Iran’s Economy Is Stagnating Even Before New US Sanctions Hit, October 30, 2018
Expert Warns “Iran’s Economy is in a Death Spiral,” April 26, 2018