Investigating the Impact of Inflation Frequency Path on the Structure of Labor Market Demand in Iran

Document Type: Original Research


1 Associate Prof. Economics, Shahid Bahonar University, Kerman, Iran

2 Assistant Prof. Economics, Shahid Bahonar University, Kerman, Iran

3 M.Sc. Student. Economics, Shahid Bahonar University, Kerman, Iran


The labor market is one of the four economic markets which possess a key role in adjusting the relationship between workforce demand and supply as well as the balance in macroeconomic variables such as employment. Hence, the basic question which is the main focus of the present paper is whether the current frequencies in inflation impact labor market demand or not? In order to answer this question based on the previous literature and theoretical concepts, labor market demand function, wage level function, gross domestic product (GDP), and the working population are considered. In this way, first labor market demand frequencies are identified for the period between 1996 and 2012 and then in order to determine the effects of inflation frequencies on labor market demand, this variable is entered into the function and it will be calculated again. The results show that wage level, gross domestic product, working population and inflation have a positive effect on the labor market demand and inflation frequencies influence labor market demand. Hence, if inflation were entered into the demand function, labor market demand structure functions would be increased and management of this market would be harder. Hence, in the case that inflation frequencies are managed it might be possible to manage the present frequencies in labor market demand.


Ghazali, M. (2009). “Trade openness and wage inequality in Tunisia, 1975-2002.” Economice Internationale 117-1T:63-97.
Jorgensona D. W., Goettleb R. J., Hoc M. S., Slesnickd, D. T., Wilcoxen, P. J. (2008). U.S. Labor supply and demand in the long run. Journal of Policy Modeling . Pages  603–618.
Kurose Kazuhiro (2013). The dynamics of the labour market and income distribution in relation to the speed of demand saturation. Structural Change and Economic Dynamics, Volume 24, March 2013, Pages 101-111.
Mouelhi, R. B. A. and Ghazali Monia (2013). Impact of trade reforms in Tunisia on the elasticity of labour demand. International Economics, Volume 134.
Palazuelos, E. and Fernández, R. (2009). Demand, employment, and labour productivity in the European economies. Structural Change and Economic Dynamics, Volume 20, Issue 1, March 2009, Pages 1-15.
Pesaran M. Hashem, Smithb Ron (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of Econometrics. Pages 79-113.
Ricne, J. (2013), Labor market conditions and social insurance in China, Research Institute of Industrial Economics (IFN), Vol 23, p. 52-68.
Todorova, T. (2012). The Economic Dynamics of Inflation and Unemployment. Theoreical Economics Letters, 133-140.