Estimation of ( labor – output) elasticity and use it to forecasting and policymaking in the Iraqi economy

A Thesis Submitted By
Wisam sarhan saihood
To The Council of Management and Economic College  University of Karbala As Partial Fulfillment of the Requirements For The
Degree of Master of Science in Economics

Supervisor By
Prof. Dr. Hameed obaid Abid

Abstract

The present  study is devoted to estimating the elasticity of (labor – output) in the Iraqi economy, at various levels, from macroeconomics to Economic activities and sectors, through the use of modern Econometrics Methodologies.

 The Autoregressive Distributed Lag (ARDL) model  It has been used After knowing the stability (stationary) of the model variables and their degree of integration

The current study attempts to answer following  questions :

What is the extent be effected the value of the elasticity and the sustainability of the relationship between production and employment if the oil sector is included or not?

What are the limits of economic growth necessary to accommodate the growth of the workforce ?

The effectiveness of economic growth in jobs creation ?

To answer the questions of the study , The research was divided into three chapters , The first focuses on the conceptualization of the concept of elasticty and the relationship between employment and output,The second chapter dealt with the study and analysis of the employment and production in the Iraqi economy, And the third chapter includes the estimation of elasticity coefficients and their use in determining the growth rates required to absorb the labor force.

The study under investigation has the following findings :

Low coefficient of elasticity (labor – output) in the Iraqi economy at the macro level and sectoral

The elasticity estimate after exclusion of the oil sector showed an improvement in the value of the elasticity coefficient (although it remained generally low)

The sustainability of the relationship between employment and production in the case of exclusion of the contribution of the oil sector, where there was a long-term balance, while the inclusion of the oil sector ,  the long-term balance is nonexistent .

incapableness of the Iraqi economy to absorb the annual growth in the labor force, so predicts the continuation of high rates of unemployment in the absence of real change of the Iraqi economy.