Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250475 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14814
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper investigates the effect of economic sanctions on employment. We exploit the imposition of a series of unexpected and unprecedented international economic sanctions on Iran in 2012 and estimate the short-run effects of the change in import exposure on manufacturing employment at the industry level. Our estimates indicate that the sanctions led to an overall decline in the manufacturing employment growth rate by 16.4 percentage points. However, we uncover significant asymmetric effects across industries with different ex-ante import shares. Interestingly, the effects are mostly driven by labor-intensive industries and industries that heavily depend on imported inputs. This suggests that the overall negative impact of the sanctions on employment might be largely due to the decline in productivity experienced by industries with a high propensity to import inputs from abroad.
Subjects: 
import exposure
employment
economic sanctions
labor reallocation
JEL: 
F16
F51
J21
Document Type: 
Working Paper

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