Structural Changes in Manufacturing and its Impact on Employment generation in Iran

In this Paper we have used various indices to describe the characteristics of Iran Manufacturing Industries during 1995-2009.We have also estimated empirically the Impact of structural changes on employment generation. The result show that structural changes in output and employment of Iran Manufacturing Industries have been accompanied by a movement away light and consumer non -durables such as Food and Textiles, towards heavy and Capital goods industries producing consumer durables, capital and Intermediate goods. The shift has been basically from low to high labor productive Industries. Our empirical Model too has shown a significant impact of structural changes on employment generation on Manufacturing Industries in Iran. The finding shows that the decrease in the employment share of industries such as Textiles and Food industries have been overcompensated by increase in the employment of electrical and non electrical machineries and transport equipments, indicating the tendencies of manufacturing industries move towards energy intensive and resource based industries such as chemicals and petrochemicals and oil refineries, Machineries and transport equipments. JEL Classification: J24, O14, O33, O40