Estimation the Demand on Human Laborby Using Dual Approachin Iraqi Agricultural Sector

Abstract

There is no doubt thateconomic efficiency achieve when all the inputs factors use in an efficient way. The aim of this paper is determined the demand for Labor and the impact of the relationship between the Labor and Capital in the Iraqi agricultural sector during the period 1990-2014 rely on the dual approach by using the profit and cost models. To estimate the profit function it used the Cobb-Douglas model, and the results showed that the Labor demand elasticity for the worker’s wage is -0.87, and that means when the wages are rise about 10% the demand of Labor will reduce about 1.78%.The cross-sectional elasticity between labor and capital is about 4.6, and that means for any increase in the capital such as 1% led to increasing the labor by about 4.6%. That confirms the hypothesis of this study where there is a substitutional relationship between the labor and capital for labor than capital, which means whenever to increase the capital or any technology improvement led to increasing the production and raises the investment. The labor demand function showed that the elasticity of the worker’s wage for the value of the wages in the agricultural profit is about 0.462. That is mean when the employee’s salary increase 1% the wages increase 0.462% from the profit, however; this rate is very low because of the agricultural sector depends on the family work regardless of the level of the wages. The cost function is determined too and used the Cobb-Doglegs model by using the Eviews.6 program. The results showed when the wages increase 1% the agricultural costs will increase too for about 16.2%, and that is mean the Iraqi agricultural sector still have real problems of disguised unemployment. The study recommended to using the intensive technological ways to increase the worker productivity