Tyranny of numbers

Signs of the economy slowing–anyone in charge?

Posted in Employment, General, Macroeconomy by Djavad on August 30, 2009

The recently published unemployment data for spring 2009 (1388) indicate that economic slowdown continued in the second quarter of 2009.  Without the national accounts data for 1387, due any day, it is difficult to be certain about the severity of the current economic slump, but unemployment and inflation data and  the continuing political crisis in Tehran are reasons to be concerned about the economy.  (more…)

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%. (more…)

Predicting productivity

Posted in Education, Employment by Djavad on May 19, 2009

To follow up on the discussion in my last post about testing regimes, I want to recommend a New Yorker article by Malcolm Gladwell about evaluating hard-to-evaluate skills.  He describes a football scout named Dan Shonka working in his hotel room carefully reviewing the DVD of a game he has just watched live:   “He had a stack of evaluation forms next to him and, as he watched the game, he was charting and grading every throw that Daniel [the quarterback] made…. Shonka had seen all the promising college quarterbacks, charted and graded their throws, and to his mind Daniel was special: ‘He might be one of the best college quarterbacks in the country.’ ”  The football industry in the US also collects mountain of statistics on each player.  Imagine just going with the objective statistics and losing the subjective evaluation of the scouts.  Gladwell says that even with people like Shonka watching rising quarterbacks like a hawk, the failure rate is high. Some productivities are just very hard to assess and predict before the fact(more…)

Jobless youth: are they too many?

Posted in Employment by Djavad on May 9, 2009

In my last post I argued that what is wrong with Iran’s unemployment is not the quality of data (though there are quality problems) nor that they come from official sources. The problem is rather with the structure of unemployment, which is is unjust and inefficient.  The burden of unemployment falls disproportionately on the young and that they wait a long time after graduation to find a job and get along with their lives.  Instead of arguing about the data collection and manipulation, we should be discussing the underlying economic structure that generates this pattern in the data. (more…)

What is wrong with Iran’s unemployment data?

Posted in Employment, General by Djavad on May 5, 2009

As I wrote in another post a few weeks ago, every time a western reporter writes about unemployment and inflation in Iran, he or she seems obligated to say that the actual rates are twice the official rates.    Often an “expert” is present to give this made-up claim an air of expertise.  (See examples for unemployment here and here, and on inflation here and here.)  I have not seen the claim repeated for inflation in 2008 ( I guess President Ahmadinejad took care of that in 2008 by doubling the actual inflation rate!), but for unemployment it is still being reported.

It is easy to dispel the myth that actual inflation has been always twice the official rate.  If you take a calculator and punch in the price of anything in 1990 and then increase it every year at twice the rate of official inflation, you would know what I am talking about.  But what about official unemployment data? Is there a way to check their veracity?   The answer is yes. (more…)

Jobs, poverty, and Mr. Moussavi

Posted in Employment, General, Poverty by Djavad on April 28, 2009

A news item on Iran’s “Worker’s news agency” (ILNA), in Persian, which belongs to the workers’ organization House of Workers, reads, “A wealthy country in which people are poor is not Islamic.”   This is a curious title for a report of a speech by Mr. Moussavi which is entirely about jobs, unemployment and productivity (delivered to the organization’s annual congress).  Why would something mentioned at the end of a speech (and reported in the last sentence of the news report) become the headline?  I think I know why. (more…)

Myths about Iran’s economy

Posted in Employment, Macroeconomy, Poverty by Djavad on March 26, 2009

Are living standards as poor as they say?

Western journalists who  travel to Iran get an earful of complaints about how bad things economic are.  The World Bank disagrees.  Iranian GDP per capita in 2007 stood at $10432 (in 2005 Purchasing Power Parity dollars), which is only one-forth that of the of the United States, and less than a thousand dollars below Turkey’s.  In terms of average growth rate of GDP per capita, Iran has actually done better than in the ten year period 1997-2007,  3.5% compared to 2.5% for Turkey. These numbers are readily available from the World Bank’s World Development Indicators website.

There is no shortages of complaints one can have about Iran’s economy (high youth unemployment, high inflation, and stagnant productivity, to name a few) , but a low standard of living is not one of them. (more…)