Volume 17, Issue 1 (2017)                   QJER 2017, 17(1): 23-44 | Back to browse issues page

‎ 20.1001.1.17356768.1396.17.1.2.2

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Kohansal M R, Permeh Z. Estimating the Effect of Reduction in Agricultural Subsidies on Production and Employment. QJER 2017; 17 (1) :23-44
URL: http://ecor.modares.ac.ir/article-18-591-en.html
Estimating the Effect of Reduction in Agricultural Subsidies on Production and Employment
Mohammad Reza Kohansal * 1, Zorar Permeh2
1- Professor of Agricultural Economics, Faculty of Agriculture, Ferdowsi University of Mashhad
2- Ph.D. Candidate in Agricultural Economics, Ferdowsi University of Mashhad, and Faculty Member of Institute For Trade Studies and Research
Abstract:   (8898 Views)
This paper investigates the effect of reduction in agricultural subsidies in Iran. To this end, the social accounting matrix (SAM) as an analytical model is developed with dimensions of 78 × 78 for the year 2006. Since the amount of subsidies paid to the agriculture sector, based on Total Aggregate Measurement of Support (TAMS), is higher than amount set by the World Trade Organization, hence, in the case of applying for membership of Iran in this organization, Iran should reduce subsidies during a 10-year period, annually by reduction as much as 13600 billion Rials. This paper studies the reduction in agricultural subsidies by 13600 billion Rials. The findings indicate the reduction in gross domestic product (GDP) by more than 57000 billion Rials. One main effect of reduction in agricultural subsidies relates to reduction in output and employment, in such a way this shock results in reducing number of agricultural employees by 86000 people. 
Keywords: Social Accounting Matrix, Unemployment, Subsidy, Gross Domestic Product, Agriculture
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Article Type: Research Paper | Subject: C67 - Input–Output Models|E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
Received: 2013/01/25 | Accepted: 2014/11/15 | Published: 2017/03/21
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