Estimated Function of Labor Force Demand in Sistan and Baluchestan Province

Estimating labor force demand models is of high significance for Iran’s economy, especially the state’s provinces, in terms of identifying factors that influence labor force demand and predicting labor force demand in the future. In order to create employment for the labor force, the factors affecting the labor force demand must be identified so that through proper planning, labor force demand increases up to an optimal level. This study aims at identifying factors influencing labor force demand and estimating the function of demand for labor force of Sistan and Baluchestan province. The years between 1979 and 2007 are the period under investigation. In this study, ARDL method was utilized because of endurable and non-endurable variables and due to peculiar advantages of this method compared to other methods. The results of the study revealed that the most important factors influencing labor force demand in Sistan and Baluchestan province were GDP (Gross Domestic Product) and capital per capita. GDP and capital per capita showed respectively a significant positive correlation and a significant negative correlation with labor force demand in Sistan and Baluchestan province, the latter result was obtained because of replacement of labor force by capital.