Activation Policies for the Poor in OIC Member States
74
that the unemployment rate for 15-24 year old women is 46%. Iran also has a low economic
participation rate of 37.9% of the working age population.117The following table provides further
data relating to Iran’s labour market:
Table 7: Labour Market and Poverty Statistics
Unemployment rate Percentage of workers
working in the
informal sector
Under employment
rate
Poverty rate
10.4% (year ending
March 2014)
- 9.5% (2014) 1.5% (2007-2011,
based on international
poverty line)
Working poverty rate Average salary Average household
expenditure
Average hours worked
per week
- - 10,925,000 rials
(US$336) per month for
urban household
Unavailable, but 39.8%
of workers work more
than 49 hours per week
Source: Statistical Centre of Iran, World Bank
Certain sources dispute the validity of the official statistics available. The World Bank, for example,
has reported that unofficial sources estimate the overall unemployment rate to be closer to 20%.118
Indicators also vary significantly between rural and urban areas. Unemployment is higher in urban
areas, for example, at 12% compared to 7.5% in rural areas. Underemployment, on the other hand, is
higher in rural areas, at 12.7% compared to 8.2% in urban areas. Underemployment also affects men
more than women, whereas, as previously mentioned, the female unemployment rate is higher than
the male unemployment rate.119
The government plays a key role in the economy. The state owns large companies which contribute
significantly to the manufacturing and commercials sectors. Public banks also have a large presence
in the financial sector. Iran’s economy has contracted in recent years, although most recently it has
contracted at a slowing pace. Economic hardship has been compounded with Iran’s exclusion from
world markets, as a result of the sanctions regime and political isolation.
In order to address poverty, the government has subsidised key staples such as bread, electricity,
water and petroleum products. In 2007/2008, overall indirect subsidies were estimated as being
worth 27% of GDP. Since 2011, a direct cash transfer payment to households has replaced some
indirect subsidies, although products such as bread continue to be subsidised. Under the cash
transfer programme, all households receive an unconditional payment worth approximately US$14.
The government is currently considering whether to implement further reforms to the subsidy plan
to target cash transfers specifically to low income households. Other measures recently
implemented to alleviate poverty include the distribution of food packages. Economists argue that
spending on food aid and monthly cash handouts could add to the budget deficit. Nonetheless, the
current administration is likely to maintain both programs at least until the end of President
Rouhani’s first term, though it has begun steadily removing well-off citizens from the register for
cash transfers.
117 Statistical Centre of Iran, 2014, A Selection of Labour Force Results – Spring 1393
118 World Bank, Iran Overview
119 Statistical Centre of Iran, 2014, A Selection of Labour Force Results – Spring1393