In March, Majlis Research Centre, the Iranian Parliament’s research arm, reported that unemployment in Iran has reached an alarming level with youth unemployment in some parts of the country as high as 50 to 63 percent. The report also confirmed that although the government has allocated a larger share of its budget to job creation it lacks a coherent plan to tackle the issue. Over the past two decades, unemployment has become one of the most challenging socioeconomic issues in Iran, with figures fluctuating between 10 and 15 percent.

As Iran’s younger generations struggle to meet financial demands due to the challenges in the job market, social consequences, such as an increase in the average age of marriage and slow population growth, are becoming visible across various social classes. In addition, increasing sociopolitical dissatisfaction among the disenfranchised social groups has led to sporadic riots and demonstrations across the country. A combination of poor political and economic policies, as well as global sanctions, is expected to increase economic pressure on Iran that will inevitably tighten the job market. This could intensify sociopolitical dissatisfaction and potentially spark further unrest. Although the government would likely show a violent response to popular mobilization, the public debate around this issue confirms a great degree of nervousness among the political elite.

The issue of unemployment in Iran is widespread across various skill levels. Of unemployed Iranians, 42 percent have at least one university degree. This trend has contributed to Iran’s long-standing brain drain. This is partly due to the mismatch between the skills taught at Iranian universities and those required by the job market. The university curriculum in Iran is relatively outdated. Every graduate from an Iranian university is required to pass compulsory modules on religious education, Islamic history, and the Quran; some universities require studying the “Will of the Founder of Islamic Republic, Ayatollah Khomeini.” Over the past four decades, higher education in Iran has been more focused on ideological teaching than required work skills. As a result, recent graduates joining the labor force often lack relevant training.

Urban unemployment and women’s unemployment are high in Iran. About 25 percent of women in urban areas of Iran are unemployed – nearly double the rate of urban male unemployment. According to the Iranian Ministry of Cooperatives Labour and Social Welfare, in 2016, the highest rate of labor participation in Iran was among rural men at 66.3 percent, while the lowest rate of participation was among urban women at 14.5 percent. Overall across the country, male labor participation at 64.1 percent is significantly higher than female labor participation at 14.9 percent. Between 2006 and 2016, labor participation in Iran did not exceed 66 percent and the low rate of women’s participation has had a direct impact on their empowerment.

Youth unemployment also increased between 2006 and 2016. More than half of young urban women in Iran are unemployed; while 28.7 percent of young rural women are unemployed. According to government data, Iranian citizens between the ages of 27 and 36 (around 1.7 million people) have the highest rate of unemployment, comprising 53 percent of unemployed Iranians, while having the highest level of education: 28.4 percent of Iranians within this age bracket have a high school diploma and 34.5 percent have at least one university degree. This suggests a decline in job creation for the younger generation as well as a mismatch between education in schools and labor market demands.

The Islamic Republic has used access to employment as a reward for those who show loyalty to the political ideology of the regime, which, over the past four decades, has put mechanisms in place to filter out Iranians who refuse to comply with this ideology. Religious minorities and political opposition members have been structurally cut out of the employment market. The western and eastern provinces of Iran along the borders with Iraq and Pakistan, home to Iranian Sufi and Sunni Kurds and Sunni Baluchis, have historically had the highest rates of unemployment in Iran. For example, the highest rate of unemployment among Iranians between 27 and 36 years of age is 36 percent in the city of Kermanshah (the capital of the western Kermanshah province). The lowest rate of unemployment in this age group is about 15 percent, in the two holy Shia cities of Qom and Mashhad.

The unemployment rate is expected to continue to rise in Iran. The government describes an economic war with the United States and senior officials blame the sanctions for poor economic conditions. The former labor minister predicted that more than one million jobs will be lost due to renewed U.S. sanctions. While it is clear that the sanctions will worsen the situation in the job market, average Iranians do not consider that as the fundamental cause of their employment difficulties. Instead, decades of ill-advised policy choices by the government and corruption of the political elite are seen as the root causes of Iran’s economic malaise. In recent months, tech-savvy Iranian youth started a campaign on social media asking Iran’s senior political figures where their children are. The campaign, which started with a hashtag, soon became so popular that even some programs on state-sponsored broadcast media began to pose this question in interviews with senior officials, and more often than not, those who answered said their children were in senior roles at various government entities or living abroad (many of them in the United States). The campaign demonstrates how average Iranians who are often struggling economically challenge widespread corruption and nepotism among the political elite.

The regime is clearly concerned with the political consequences of rising unemployment, but there is no coherent policy to address the issue in a sustainable way. Both the public and private sectors are unable to absorb the young Iranians joining the labor force each year. As a result, poverty, social dissatisfaction, and a general lack of hope for the future among many Iranian citizens is likely to rise. This in turn may prompt more government scrutiny of public and cyber spaces, and – if there is a mobilization of the public as a reaction – it is likely to provoke a violent response from the state.