Impressibility of Wages from Labor Force Productivity in Iran (Application of Johansen-Juselius Method)
Subject Areas : Business ManagementRoya Aleemran 1 , Seyyed Ali Aleemran 2
1 - Assistant Professor, Department of Economics, Tabriz Branch, Islamic Azad University, Tabriz, Iran
2 - PhD student of Economics, Tabriz University
Keywords: Wage, Labor force productivity, Education level of labor force, Employment rate,
Abstract :
Wage and labor productivity are two key variables of labor market and are of interest to the economics connoisseurs on two levels – micro and macro – from the viewpoint of economic logic and policy-making. These two variables are related, on the one hand, to the efficacy of the economic secrots’ decisions and on the other, to the economic growth, development, and welfare. The purpose of the present research is to investigate the impressibility of wages from the labor productivity in Iran during the period from 1978 to 2012. For the theoretical analysis of the subject, Johansen - Juselius method has been used. The results obtained from the research indicate that the impact of the variable coefficients accorded with the theoretical foundations and were statistically significant. The results show that the increase in each variable – average productivity of labor, minimum wage, educational level of the labor force, and the rate of labor force employment – causes the increase in average wage. Also, the results of vector error correction model indicate that in each period, 0.79 of short run imbalances are adjusted to achieve long run balance.
- Bagger, J., & Christensen, B. J., & Mortensen, D. T. (2014). Wage and Labor Productivity Dispersion: The Roles of Total Factor Productivity, Labor Quality, Capital Intensity and Rent Sharing. Available at: http://Pure.rhul.ac.uk/portal/en/publications.
- Bester, H., & Petrakis, E. (2003). Wages and Productivity Growth in a Competitive Industry. Journal of Economic Theory, 109, 52-69.
- Connolly, H., & Gottschalk, P. (2006). Differences in Wage Growth by Education Level, Do Less-Educated Workers Gain Less from Work Experience?. Department of Economics, Northeastern University.
- Conti, G. (2005). Training, Productivity and Wages in Italy. Labour Economics, 12, 557-576.
- Enders, W. (2004). Applied Econometric Time Series. USA: University of Alabama.
- Gudarzi, M., & Atayi, M. (2009). The Relationship Between Wages and labor Productivity in the University. Journal of Modern Industrial/Organizational Psychology, 1, 71-76, (In Persian).
- Hazhir Kiani, K., & Bagheri Ghadi Kolayi, M. (2004). The Effect of ICT on the Productivity and Labor Wages in the Industries of Tehran province. Peak Light-Human Sciences, 2, 28-46, (In Persian).
- Hushmand, M., & Fahimi Doab, R. (2010). Estimate the long-term Relationship Between the Real Price of crude oil and the real value of the US dollar, Quarterly Knowledge and Development, 31, 98-134, (In Persian).
- Kazeruni, A R., Sojudi, S. (2006). The Role of Productivity in Determining the level of Labor Wages in the Industrial sector of Iran (1997-2003), the Approach of Data Panel. Tahghighate Eghtesadi, 76, 169-187, (In Persian).
- Khanjari, S., & Homayunifar, M. (2011). The Examination the Effects of Current Shocks on the Real Wages in the Industrial Sector of Iran. Economics Research, 11, 97-110, (In Persian).
- Klein, N. (2012). Real Wage, Labor Productivity and Employment Trends in South Africa: A Closer Look. IMF Working Paper, 1-27.
- Taei, H., Bahrami, J. & Bagheri, N. (2010). Is the wages in Iran's Manufacturing Industries Determined by Productivity. Iranian Journal of Economic Research, 43, 141-160, (In Persian).
- Lopez-Acevedo, G. (2003). Wages and Productivity in Mexican Manufacturing. Working Paper, 2964.
- Mohammadi khah, A., Mohammadi, T., & Taei, H. (2012). Examination the Belateral Relationship Between Wage and Productivity in Iran's Manufacturing Industries. Quarterly Journal of Applied Economic Studies in Iran, 4, 181-209, (In Persian).
- Wakeford, J. (2004). The Productivity-Wage Relation Ship in South Africa: an Empirical Investigation. Development South Africa, 21.
- Yellen, J. (1984). Efficiency Wage Models of Unemployment. American Economic Review Proceeding, 74, 200-205.
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- Bagger, J., & Christensen, B. J., & Mortensen, D. T. (2014). Wage and Labor Productivity Dispersion: The Roles of Total Factor Productivity, Labor Quality, Capital Intensity and Rent Sharing. Available at: http://Pure.rhul.ac.uk/portal/en/publications.
- Bester, H., & Petrakis, E. (2003). Wages and Productivity Growth in a Competitive Industry. Journal of Economic Theory, 109, 52-69.
- Connolly, H., & Gottschalk, P. (2006). Differences in Wage Growth by Education Level, Do Less-Educated Workers Gain Less from Work Experience?. Department of Economics, Northeastern University.
- Conti, G. (2005). Training, Productivity and Wages in Italy. Labour Economics, 12, 557-576.
- Enders, W. (2004). Applied Econometric Time Series. USA: University of Alabama.
- Gudarzi, M., & Atayi, M. (2009). The Relationship Between Wages and labor Productivity in the University. Journal of Modern Industrial/Organizational Psychology, 1, 71-76, (In Persian).
- Hazhir Kiani, K., & Bagheri Ghadi Kolayi, M. (2004). The Effect of ICT on the Productivity and Labor Wages in the Industries of Tehran province. Peak Light-Human Sciences, 2, 28-46, (In Persian).
- Hushmand, M., & Fahimi Doab, R. (2010). Estimate the long-term Relationship Between the Real Price of crude oil and the real value of the US dollar, Quarterly Knowledge and Development, 31, 98-134, (In Persian).
- Kazeruni, A R., Sojudi, S. (2006). The Role of Productivity in Determining the level of Labor Wages in the Industrial sector of Iran (1997-2003), the Approach of Data Panel. Tahghighate Eghtesadi, 76, 169-187, (In Persian).
- Khanjari, S., & Homayunifar, M. (2011). The Examination the Effects of Current Shocks on the Real Wages in the Industrial Sector of Iran. Economics Research, 11, 97-110, (In Persian).
- Klein, N. (2012). Real Wage, Labor Productivity and Employment Trends in South Africa: A Closer Look. IMF Working Paper, 1-27.
- Taei, H., Bahrami, J. & Bagheri, N. (2010). Is the wages in Iran's Manufacturing Industries Determined by Productivity. Iranian Journal of Economic Research, 43, 141-160, (In Persian).
- Lopez-Acevedo, G. (2003). Wages and Productivity in Mexican Manufacturing. Working Paper, 2964.
- Mohammadi khah, A., Mohammadi, T., & Taei, H. (2012). Examination the Belateral Relationship Between Wage and Productivity in Iran's Manufacturing Industries. Quarterly Journal of Applied Economic Studies in Iran, 4, 181-209, (In Persian).
- Wakeford, J. (2004). The Productivity-Wage Relation Ship in South Africa: an Empirical Investigation. Development South Africa, 21.
- Yellen, J. (1984). Efficiency Wage Models of Unemployment. American Economic Review Proceeding, 74, 200-205.
