Khorasan Razavi Province filed the lowest unemployment rate of 5.7% among all Iranian provinces in Q2 while Chaharmahal-Bakhtiari Province registered the highest rate of 16.3%.
During the same quarter of last year (June 22-Sept. 22, 2019), Zanjan Province posted the lowest unemployment rate with 5.2% and Yazd recorded the highest joblessness rate with 15.1%, the Statistical Center of Iran reported.
Sixteen provinces, namely Khorasan Razavi (5.7%), South Khorasan (5.8%), Ilam (6.2%), Tehran (6.4%), Hamedan (6.8%), Semnan (6.8%), Ardabil (6.9%), East Azarbaijan (7.4%), Zanjan (7.5%), Mazandaran (7.7%), Golestan (8%), Markazi (8.1%), Fars (8.5%), Qazvin (8.5%), Yazd (9.4%), and Kohgilouyeh-Boyerahmad Province (9.9%), registered single-digit unemployment rates for people of ages 15 and above in Q2 of the current fiscal year.
Hormozgan had the highest labor force participation rate (50.6%) and Kohgilouyeh-Boyerahmad Province had the lowest labor force participation rate (34.1%).
Hormozgan registered the highest employment rate of 43.9% while Sistan-Baluchestan filed the lowest employment rate of 30.6% among all Iranian provinces.
Tehran Province, wherein lies the capital city, registered a 6.4% unemployment rate, 39.5% participation rate and 37% employment rate this summer.
Iran's Q2 Jobless Rate at 9.5%
Iran’s unemployment rate, the proportion of jobless population of ages 15 and above, stood at 9.5% in the second quarter of the current Iranian year, indicating a 1% decline compared with the same period of last year.
A total of 2,477,350 Iranians were unemployed in Q2. Men’s unemployment stood at 8.1%, while the rate for women hovered around 16.5%. Over 1.75 million men and 725,433 women of ages 15 and above were jobless in Q2.
The unemployment rate was 10.6% for urban areas (2.06 million people) and 6.3% for rural areas (412,578 people).
SCI put Q2 labor force participation rate—the proportion of the population of ages 15 and above that is economically active either employed or looking for job—at 41.8% or 26.01 million people, registering a 3.1% decrease year-on-year.
Men’s and women’s economic participation rates were 69.5% and 14.1% respectively in the same period.
A total of 21.62 million men and 4.39 million women of ages 15 and above were economically active in Q2, i.e., they were either employed or looking for job.
SCI provides two figures for the youth unemployment rate: the proportion of 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 23.1% in Q2, posting a 3% decrease while the unemployment rate of those between 18 and 35 years stood at 16.9%, posting a decline of 1% YOY.
Underemployment, the condition in which people in a labor force are employed for less than 44 hours of service per week, stood at 9.3%, up 0.5% year-on-year and was higher for men and those living in rural areas.
The Q2 underemployment share of men and women stood at 10.1% and 4.8%, respectively, while it was 8.2% for urban areas and 12.3% for rural areas.
Unemployment rate for university graduates stood at 14.9% in Q2, posting a 2.3% decrease YOY. Higher education unemployment rate for men stood at 10.9% and that of women stuck around 23.9%.
The share of higher education unemployment from the total unemployed population was 40.7% in Q2, which indicates a decrease of 3.1% year-on-year.
The unemployment shares of male and female graduates from the total unemployed population stood at 29.1% and 68.8%, respectively, while the share of higher education unemployment from the total unemployed population were 43.5% in urban areas and 26.5% in rural areas during the period.
Employment is defined as persons of working age engaged in any activity to produce goods or provide services for pay or profit, whether at work during the reference period or not at work due to a temporary absence from a job, or to working-time arrangement.
The total Q2 employment rate was 37.8% (23.54 million), down 2.4% compared with the same quarter of last Iranian year. Employment rates for men and women were 63.8% and 11.8%, respectively, which constituted 19.87 million men and 3.66 million women in Q2.
Employment rate was 36.5% or 17.38 million in urban areas and 42.1% or 6.16 million in rural areas.
The share of employment of university graduates stood at 24.4% of the total employed population, wherein male and female graduate employment was 20.9% and 43.2%, respectively.
Graduate employment rates in urban and rural areas stood at 30.1% and 8.1% of the total population of job-holders.
Q2 statistics show that 36% of the country’s labor force worked more than 49 hours per week, indicating a 4.7% decrease over the same period of last year.
Sectoral Review
The services sector employed 48.1% of the Iranian employed population (11.32 million), 1% less than the corresponding period of last year, whereas industrial and agricultural sectors provided 33.4% and 18.5% of jobs respectively.
Over 7.86 million were employed in the industrial sector, indicating an increase of 1.4% compared with the year before and 4.34 million worked in agriculture, posting a 0.5% decline YOY.
The services sector consists of wholesale and retail trade; restaurants and hotels; transport, storage and communications; financing, insurance, real estate and business services; as well as community, social, education, health and personal services.
The services sector employed 9.31 million men and 2 million women in the three-month period; over 6.97 million men and 891,528 women were working in the industrial sector and 3.57 million men and 769,617 women worked in the agriculture sector in Q2.
Services sector accounted for 57.5% or 9.99 million of all jobs in urban areas and 21.7% or 1.33 million of jobs in rural areas. The industrial sector made up 35.4% or 6.14 million of the jobs in urban areas and comprised 27.9% or 1.71 million of employment in rural areas. This is while 7.1% or 1.24 million of the total jobs in urban areas and 50.4% or 3.1 million of the jobs in rural areas were in the agriculture sector.
Decline in Labor Force Participation
The outbreak of coronavirus and its associated challenges have had a significant impact on Iranians in terms of labor force participation.
The decline in Q2 labor force participation rate (3.1%) despite a drop in unemployment rate was also the case in the first quarter of the current fiscal year (March 20-June 20).
Labor force participation fell by 3.7% to 41% (or 25.46 million people) in Q1. Men’s and women’s economic participation rates were 67.9% and 14.1% respectively in the same period.
According to SCI, 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 a 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 are not included in unemployment calculations, which only capture people who are looking for work. This means that the fall in labor force participation translates 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 in the labor force, 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.
"A decrease in the unemployment rate is not 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 has not improved. For an economy to run satisfactorily, the decline in unemployment rate must couple with an increase in both economic participation and employment rates," the SCI chief noted.
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 the current 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 that economic activities are divided into, only five groups reported an increase in their 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, including agriculture, industries and manufacturing, retail and wholesale, transportation, education, hotels and restaurants.”