SCI Chief Expounds on Q1 Labor Market Data

EghtesadOnline: The outbreak of coronavirus and its associated challenges have had a significant impact on Iranians in terms of labor force participation—the proportion of the adult population (ages 15 and above) who are employed or seeking jobs—employment and hours worked.

News ID: ۷۸۵۵۶۳

15 July 2020

Labor force participation fell by 3.7% to 41% (or 25.46 million people) over the first quarter of the current Iranian year (March 20-June 20). Men’s and women’s economic participation rates were 67.9% and 14.1% respectively in the same period.

According to the Statistical Center of Iran, 21.07 million men and 4.39 million women of ages 15 and above were economically active in Q1, i.e., they were either employed or looking for job.

“A total of 2.76 million people (1.3 million men and 1.46 million women) were added to the number of inactive labor force in the first quarter; 14.8% of the employed population and 37.2% of unemployed population of the same period of last year were added to the population of people outside the labor force this year,” says Javad Hosseinzadeh, the head of SCI.

These individuals aren’t included in unemployment calculations, which only take into account people who are looking for work. This means that the fall in labor force participation is due to people not searching for work, chiefly due to the outbreak of coronavirus, and consequently a decline in unemployment rate.

Iran’s unemployment rate, which is calculated by dividing the number of unemployed people by the total number of laborers, then multiplying by 100, stood at 9.8% in Q1, indicating a 1.1% decline compared with the same period of last year. A total of 2,505,336 Iranians were unemployed in Q1.

Not Necessarily a Good Sign

The SCI chief noted that a decline in unemployment rate isn’t necessarily a sign of an improving economy.

“When people stop looking for jobs and drop out of the labor force, the unemployment rate will decline even though the true employment situation hasn’t improved. For an economy to run satisfactorily, the decline in unemployment rate must couple with an increase in both economic participation and employment rates," he said.

The total Q1 employment rate was 36.9% (22.96 million), down 2.9% compared with the same quarter of last Iranian year. Employment rates for men and women were 61.8% and 12.2%, respectively, which constituted 19.17 million men and 3.78 million women in Q1.

The employment rate was 35.7% or 16.99 million in urban areas and 40.8% or 5.97 million in rural areas.

Decline in Working Hours

Hosseinzadeh referred to an unprecedented decline in average working hours due to the pandemic and said the average working hours have decreased from 45.8 hours per week in Q1 of last fiscal year to 40.4 hours per week this spring.

Generally, during the first quarter of current Iranian year, 56.1% of the employed population worked 44 or more hours per week and 36.7% put in fewer than 44 hours while 7.2% were temporarily absent from work, he said.

And in a further sign of the impact of coronavirus on Iran’s labor market, the official said, “Out of 20 groups of economic activities, only five groups reported an increase in employed population in Q1 compared with last year’s similar period. The highest increase in the number of employees was posted for healthcare and social workers, and the sharpest decline was registered in fields, such as agriculture, industries and manufacturing, retail and wholesale, transportation, education, hotels and restaurants.”

SCI provides two figures for the youth unemployment rate: the proportion of the population between 15 and 24 years and those between 18 and 35 years.

The youth unemployment rate of those between 15 and 24 years stood at 24.5% in Q1, posting a 2% decrease while the unemployment rate of those between 18 and 35 years stood at 16.7%, posting a decline of 1.5% YOY.

Marked Decline in Unemployment Filings

The Ministry of Cooperatives, Labor and Social Welfare has registered a 94% decrease in the number of people filing for unemployment during the month ending May 20 compared with that in the month ending March 19, according to Masoud Babaie, an official with the ministry.

A total of 851,864 people filed for unemployment benefits from February 29 to June 20, of whom 711,800 have found to be eligible for unemployment benefits, he was quoted as saying by IRNA.

“As per a decision by the National Taskforce to Fight Coronavirus, the fiscal month ending May 20 was the last month coronavirus unemployment benefits would have been available and the applicants had until June 20 to register at Bimebikari.mcls.gov.ir,” he said.

“A total of 18,255 people filed for unemployment benefits during the month ending June 20; their list will be sent to Social Security Organization this week. Applications for benefits do not need to be evaluated by related commissions; they will be certified if they meet the requirements described in the website.”

With 151,724 applications, Tehran registered the highest number of unemployed workers in the country whereas North Khorasan recorded the lowest number of workers losing their jobs in the wake of coronavirus outbreak with 4,391 files, the Persian-language daily Shargh reported.

The second highest number of unemployment applications was recorded by Fars Province with 73,195, followed by Isfahan with 65,436 and Khorasan Razavi with 48,964.

The southern province of Khuzestan, which is now an epicenter of the virus, registered 31,942 applications for unemployment benefits.

Mazandaran and Gilan, which emerged as the hardest-hit provinces at the start of the pandemic in Iran, have recorded 30,880 and 21,579 unemployment files. The amount of unemployment benefit is 8.25 million rials per month, which would be granted for three months.