In the literature of development economics, institutions are regarded as;
necessary grounds in the absence of which, economic growth and;
development will not take place fully. Laws and regulations are among;
institutions which play an important role in setting the direction of;
economic activities and labor law is a prominent instance of those laws in;
Iran. This law was amended in 1990 to provide more support for workers in;
comparison to its predecessor, but also imposed more liabilities on;
employers. This paper reviews impact of this measure on Iran’s industrial;
sector. Theoretical arguments have pointed to various, and sometimes;
contradictory, effects of the amendment. The findings of this study, which;
has taken advantage of combined data related to workshops with 50 workers;
in the period between 1988 and 2002, show that changes in Iran’s labor law;
have helped to increase the share of the country’s industries in the national;
economy and have facilitated industrial development in Iran.
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