Investigating The Impact of Corruption on the Labor Force Participation Rate

Document Type : Scientific paper

Authors

1 PhD student in Economics, Tabriz Branch, Islamic Azad University, Tabriz, Iran

2 Department of Economics, Tabriz Branch, Islamic Azad University, Tabriz, Iran

3 Professor of Economics, University of Bu Ali Sina, Hamedan, Iran

4 Assistant Professor, Department of Economic, Accounting and Tourist Management, Faculty of Literature and Humanities, University of Guilan, Rasht, Iran

Abstract

The labor force participation rate is one of the key indicators of the labor market. One of the factors that can affect the labor force participation rate is the corruption index. Therefore, the purpose of this article is to investigate the impact of Transparency International's Corruption Perception Indicators, Kaufman et al.'s (2014) Corruption Control Index, and the International Country Risk Guide Index on labor force participation rates in selected MENA countries during the period 2002-2008. For this purpose, three models were estimated separately. Also in this research, for obtaining reliable results, the Cup-FM Method was used to estimate the model. Results of estimation of all three models showed that a higher corruption index has a negative effect on labor force participation rate and this effect is statistically significant at a 5% significance level. Per capita income and unemployment rate have a significant negative effect on labor force participation rates at the 5% significance level. The effect of urbanization rate on labor force participation rate is positive and this effect is not significant at the 5% level. Education and wages also have a significant positive effect on labor force participation rates at the 5% significance level. Also, the high level of economic development has a positive and significant impact on the labor force participation rate.

Keywords

References

Agheli Kohneh shahri, L. A., & Ghafari, H. M. (2010). The Role of Early Retirement in Aging Workforce Participation: A Case Study of Tehran. Useful letter, 78, 15- 148. (in Persian).
Amarandei, C. M. (2013). Corruption and foreign direct investment: evidence from central and eastern European states. Journal of CES working Paper, 5(3), 311-322.
Bai, J., Kao, C., & Ng, S. (2009). Panel Cointegration with Global Stochastic Trends. Journal of Econometrics, 149(1), 82- 99.
Bennedsen, M., Kasper, M. N., Francisco P. G., & Daniel, W. (2007). Inside the Family Firm: The Role of Families in Succession Decisions and Performance, forthcoming. Quarterly Journal of Economics, 122( 2), 647- 691.
Cooray, A., & Dzhumashev, R. (2018).  The effect of corruption on labour market outcomes. Economic Modelling, xxx(2018), 1– 12.
Faridi, M. Z., Chaudhry, I. S., & Anwar, M. (2009). The socio-economic and demographic determinants of women work participation in Pakistan: evidence from Bahawalpur District.
Ghavidel, S., & Bahari, F. (2012). Investigating the factors affecting the supply of youth labor in Iran. The Journal of Economic Studies and Policies, 90(1), 137- 150. (in Persian).
Gitter, R. (1982). The Determinants of the Labor Force Participation Rate of Prime Age Males: A Study across Communities. The American Economist, 26(2), 11- 16.https://data.worldbank.org/. https://www.imf.org/en/Data.
Karimi, S., Gilak hakim abadi, M., & Nabati, Z. (2018). Financial Corruption and Women Employment in Selected Countries. Women Studies, 8(22), 65-81. (in Persian).
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2014). Governance matters VII: Aggregate And Individual Governance Indicators 1996-2007. Project, World Bank.
Khadim, Z., & Akram, W. (2013). Female labour force participation in the formal sector: An empirical analysis from PSLM (2007-2008). Middle East Journal of Scientific Research, 14(11), 1480- 1488.
Khalid, N. M. (2013). Economic Determinants and Female Labour Force Participation: An Empirical Analysis of Pakistan. Developing Country Studies, 13(2), 12- 24.
Majles Research Center. (2017). Pathology of Iran's labor market policies and regulations, recognizing the current situation of the labor market with emphasis on provincial differences.Office of Economic Studies. (in Persian).
Musai, M., Mehregan, N., & Rezaee, R. (2010). Fertility Rate and Women’s participation in Labor Force Case Study: Middle Eastern and North African Countries. Women in Development & Politics, 8(2), 55- 68. (in Persian).
Ngeh, E. T. (2016). Female labour force participation and sectional choices for females in Cameroonian labor market. International Journal of Innovation and Scientific Research, 21(1), 118- 129.
Pesaran, M. H. (2004), General Diagnostic Tests for Cross Section Dependence in Panel. CESifo, Working Paper, No. 1229.
Rafiei Darani, H., & Ghorbani, M. (2015). Labor Participation in National Economics: Spatial Regression Analysis. Journal of Economic Modeling Research, 5(18), 119- 140. (in Persian).
Transparency International. (2018). Corruption Perceptions Index. http://www. transparency.org/cpi2014/results.
Westerlund, J., & Edgerton, D. (2008). A Simple Test for Co Integration in Dependent Panels with Structural Breaks. Oxford Bulletin of Economics and Statistics, 70(2), 665-705.           
World Bank. (2019). Labor force participation rate, total. https://data.worldbank.org/.
Macroeconomics Research Letter
Volume 15, Issue 29
August 2020
Pages 291-322

Files

History

  • Receive Date: 13 July 2020
  • Revise Date: 09 October 2020
  • Accept Date: 29 December 2020

Share

How to cite

Statistics