Authors
1 Associate Professor, University of Tabriz
2 M. A. Economics
Abstract
The main objective of this paper is to estimate the relationship between the real wage rates and labor productivity in the industrial sector of Iran over the period 1979-2002. The empirical results obtained form the ARDL estimation model confirm a long run (co-integrated) relationship between the real wage rate and the productivity along side with other variables in the model where the labor productivity has a positive impact on real wage rate, but is not significant statistically. Also, the Granger test demonstrates that there is no causality link between these two variables. In fact, other factors, including the government domination on the major industrial units (by setting an administrated wage rates), labor laws, and lack of effective labor unions have led to an inflexible wage rate system.
Keywords
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