Tyranny of numbers

Unemployment rising

Posted in Employment by Djavad on July 9, 2009

The latest unemployment figures from the Statistical Center of Iran (SCI) show that in the winter 1387 quarter (2009-Q1) unemployment rose to 12.5%, from 11.9% in winter 1386. This is not a large increase but it does undermine the claim made by Mr. Ahmadinejad during the election debates that unemployment is on its way down. Unemployment is usually highest in winter, but last year the fall-to-winter increase was particularly fast: the unemployment rate rose by 3 percentage points in three months, from 9.5% to 12.5%.During the presidential debates, Mr. Ahmadinejad claimed that unemployment in 1387 was lower than the years before, a claim that SCI figures corroborate (10.4% in 1387 compared to 10.5% in 1386 and 11.3% in 1385, see a detailed SCI report here). Critics of Mr. Ahmadinejad pointed out that this decline may be due to the change in how unemployment is defined and measured, but these figures all come from the same source with the same definition.

In 1384 SCI moved from its Employment Survey to a more standard Labor Force Survey, which incorporated the International Labor Office (ILO) methodology. Among the changes was the definition of being employed, which changed from having worked at least two days last week to one hour. Critics charged that the declining unemployment rates are due to this change of definition. This is not true as the rates I quoted above all come from the new survey. I believe the difference between the two definitions amount to about 2 percentage points in the unemployment rate.

The question is if the recent increase in unemployment will persist into 1388.  The first quarter data is due soon.  The answer will reveal a complex set of effects, from those resulting from the liberal import policy of the last 2-3 years (Duch Disease) and from the more recent post-election crisis.  I imagine that we will see a bit of both.

8 Responses

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  1. […] [11] Javad Salehi-Isfahani, “Tyranny of Numbers: Unemployment Rising,” July 9, 2009, https://djavad.wordpress.com/2009/07/09/unemployment-rising/#more-496. […]

  2. […] [11] Javad Salehi-Isfahani, “Tyranny of Numbers: Unemployment Rising,” July 9, 2009, https://djavad.wordpress.com/2009/07/09/unemployment-rising/#more-496. […]

  3. Behrooz said, on August 30, 2009 at 10:17 pm

    Aren’t you going to post something here?

    • dsalehi said, on August 30, 2009 at 11:40 pm

      Thanks for asking! I was about to post something after several weeks of absence from this blog. I hope to get back on track now that I have relocated for the academic year 2009-10 in Cambridge, Mass.

  4. Cyrous said, on July 15, 2009 at 10:04 am

    Dr. Salehi, Thank you for the informative article, is the switch to at least one hour of work part of ILO methodology? How do you estimate the 2% difference between the two definitions?

    • Djavad said, on July 15, 2009 at 9:44 pm

      Yes it is the ILO and the international standard. My calclucations were of the back of the envelop variety. To compare the unemployment rates from the two surveys, I counted the number of people who reported working for at least one hour last week (employed according to the new LFS), but less than two days in the previous 7 days (employed according to the LFS but unemployed according to the old HEUS). About 2% of the workforce fell into this category in 2007.

  5. سروش said, on July 10, 2009 at 5:34 pm

    I think they use the 2 hours basis for employment rather than one hour. By the way SCI could not convert the employment data before 1383 based on new definition, and thus the critics seem to be reasonable.

    • Djavad said, on July 15, 2009 at 9:38 pm

      No, it is one hour. Here is what they have on their website (in Persian):
      تمام افراد 10 ساله و بيش‌تر كه در طول هفته مرجع، طبق تعريف كار، حداقل يك ساعت كار كرده و يا بنا به دلايلي به‌طور موقت كار را ترك كرده باشند

      True, they have not. I have compared the old and new using the hours data and the difference is not more than 2%. The point is that since 1384 (2005) the new survey shows a slight decline, which is the period in question. But if you go prior to 1384 then you cannot compare, or you have to subtract about 2% from the rates in prior years.

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