Labor demand shocks, unemployment, and suicide: evidence from provinces across Iran

ABSTRACT In this paper, we investigate the relationship between the unemployment rate and suicide rate using data from all provinces of Iran and over the years 2009–2015. We exploit the variations in national industry-specific labor demand changes and province-level industry-composition as plausibly exogenous shocks to the province-level employment growth. Using a 2SLS-IV approach, we find that a 1 percentage point increase in the unemployment rate is associated with 0.72 and 0.68 higher incidences of suicide attempt and death per 100,000 population, respectively. Although both OLS and 2SLS-IV approach reveals consistent and statistically significant results, the marginal effects of the 2SLS-IV approach are larger, implying that Endogeneity issues underbias the OLS results of the relationship between unemployment rates and suicide rates.