A Nonlinear Dynamic Model of Female Labor Supply: Iran Case Study

In developing countries, one of the most essential economic problems is the high unemployment rate along with the low economic growth. In these cases, female unemployment rate is higher than average unemployment rates. In order to analyze the situation and then take it under control, a mathematical model for both sides of female labor market is required. In this paper, an analytical dynamical model is developed for the Iranian female labor supply. The lifecycle theory is used to divide it into three age groups. Then the static theory is used as a basis to construct each model analytically. It has been presented that some criteria such as the education level, marriage and history of unemployment rate can strongly affect the labor supply as well as the rate of real wage and real non-labor income has both the substitution and income effects. Moreover, a reservation wage is estimated for each model.