Asymmetric Impacts of Oil Price Shocks and Foreign Direct Investment on Unemployment Rate in Iran

اقتصاد و توسعه منطقه ای

Volume 31, Autumn&Winter2025 - Serial Number 28, February 2025

Document Type: Original Article

DOI: 10.22067/erd.2024.84497.1199

Authors

Ahmad Seraji¹; majid dashtban^{* 2}; azim nazari²

¹MA in Economics, University of Bojnord

²Assistant Professor of Economics, University of Bojnord

Abstract

The harmful effects of high unemployment rate have made the growth of production and employment one of the important goals of developing economies. Currently, Iran's economy is facing the problem of high unemployment rate and its economic and social consequences. Oil price shocks and foreign direct investment are among the factors that can affect the unemployment rate in Iran. In this paper, we investigate the asymmetric effect of oil price shocks and foreign direct investment on the unemployment rate in Iran. For this, we used time series data in the period of 1976-2021 and the NARDL method. The results of the estimation showed that increases and decreases in both variables of oil price and foreign direct investment have a negative and significant effect on the unemployment rate. Therefore, reducing dependence on oil exports, due to extreme oil price fluctuations, and providing a platform to attract more foreign direct investment can lead to a decrease in the unemployment rate in Iran.

Keywords

Unemployment Rate; Oil Price; Foreign Direct Investment; Real Gross Domestic Product

References