Abstract
The Iranian economy has underperformed for decades due to a combination of distortionary economic policies, mismanagement, and periods of crippling international sanctions. The Sixth Five-Year Economic, Social, and Cultural Plan (2016–2021) aims to correct some of the past mistakes and tackle deep-rooted challenges across the public and private sectors to generate an average 8% GDP growth per annum that can create much-needed jobs and narrow the widening income inequality. Achieving these targets, or even more modest ones, requires significant and broad-based structural and institutional reforms that can be summed up as a new industrial policy. Recent cross-country empirical evidence demonstrates that tinkering with fiscal, monetary, or trade policies is not sufficient. The emerging literature suggests that realizing also women’s economic potential and capitalizing on the female talent pool can be a powerful policy lever to augment and generate growth, diversify the economy, and build a resilient middle class. This chapter argues that concurrent with structural reforms, Iran must address gender inequalities and barriers to women’s economic activities. Iran has one of the lowest female labor force participation rates in the world due to significant legal and social impediments and despite impressive female educational achievements. The chapter concludes that without addressing this oft-overlooked policy domain to remove gender-based barriers, Iran is unlikely to achieve its Five-Year Plan growth and income distribution targets.
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Notes
- 1.
- 2.
Yet, largely due to a host of restrictive institutions, the 17% female labor force participation rate in Iran is even lower than Saudi Arabia’s 20%.
- 3.
“[US] Federal Reserve Chair Janet L. Yellen has prescribed an unusual remedy for the United States’ aging, low-growth economy: harness the under-tapped pool of female talent” (Washington Post 2017).
- 4.
More recent research has focused on how countries diffuse technology and how these differences produce different growth paths.
- 5.
The 13 economies were Botswana; Brazil; China; Hong Kong, China; Indonesia; Japan; the Republic of Korea; Malaysia; Malta; Oman; Singapore; Taiwan, China; and Thailand. Two other countries, India and Vietnam, were also considered.
- 6.
Perhaps a good way to visualize the difference between the old and the new structural economics is the distinction between Saudi Arabia, which has an economy built on the old structuralist concept of “endowments,” and Dubai, which has little of any old-style resources, but has been able to promote a modern and diverse industry through a combination of “hard and soft” infrastructure.
- 7.
Introducing new product lines and creating a more balanced mix of existing products.
- 8.
“[M]oving from a situation of absolute gender inequality to perfect gender equality measured by the index could decrease the Theil index of export diversification, i.e. increase export diversification in low-income and developing countries, by 0.6–2 units. The magnitude of this effect is equivalent to up to about two standard deviations of the index across low-income and developing countries” (Kazandjian et al. 2016: 13).
- 9.
“[T]he analysis highlights significant determinant of export and output diversification, even after including legal rights for women, such the right to be the head of a household or marital property rights, as instruments for gender inequality in GMM regressions. The instruments [used] pass standard econometric and rule-of-thumb tests. Each of the instruments is individually significant in the first-stage regressions, and the F-statistics of the IV regressions are well above the rule-of-thumb threshold value of 10. In addition, in specifications with two or more instruments, the p-values of the Hansen J-statistic do not allow us to reject the joint null hypothesis that the instruments are uncorrelated with the error term, supporting our hypothesis that the excluded instruments are indeed correctly excluded from the estimated equation. These results suggest that gender inequality may be indeed a cause of lower economic diversification” (Kazandjian et al. 2016: 17).
- 10.
In particular, the following factors are all related to a statistically significant decrease in the gender gap in labor force participation: legally guaranteed equality between men and women; equal property rights equal inheritance rights for sons and daughters; joint titling for married couples; women’s liberty to pursue a profession, obtain a job, or open a bank account; a woman’s right to initiate legal proceedings without her husband’s permission; right to sign a contract; and a woman’s right to be the head of a household. These effects come in addition to other factors, such as demographics, education, and family policies that have the expected sign and are statistically significant in the regression analysis.
- 11.
It is often argued that women work informally. ILO estimates include informal workers, women who work without remuneration in family work, and part-time workers.
- 12.
Karamesini and Koutentakis discuss the labor market flows and unemployment dynamics by sex in Greece during the crisis, while Daouli et al. highlight the added worker effect of married women in Greece during the crisis.
- 13.
They estimate gross impact as a percentage increase in per capita GDP assuming women have the same hours of work and productivity as men. Net impact adjusts for productivity drag and part-time work.
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Chamlou, N. (2018). Gender and Industrial Policy: Considerations for Iran. In: Alaedini, P., Razavi, M. (eds) Industrial, Trade, and Employment Policies in Iran. Springer, Cham. https://doi.org/10.1007/978-3-319-94012-0_8
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