Youth Unemployment Declines and Service-Sector Jobs Grow in Summer

TEHRAN (Iran News) The new report shows that the unemployment rate among young people aged 15 to 24 dropped by one percentage point compared with last year—reaching 15.9% in rural areas and 20.1% in cities. This marks the lowest youth unemployment rate since 2020, largely attributed to higher labor force participation and the entry of more young people into service and industrial jobs.

The overall national unemployment rate stands at 7.5%, a slight 0.1% increase from the summer of 2024. In urban areas, the rate is 7.0%, while in rural regions it is 5.3%. Among the provinces, Ardabil recorded the highest unemployment rate at 10.6%, and West Azerbaijan the lowest at 5.2%.

Employment in the service sector rose from 59.5% in summer 2024 to 60.3% in summer 2025. This 1.6-point increase occurred mainly in urban areas, driven by growth in education, healthcare, and digital businesses.

The share of underemployment—workers who work fewer hours than standard or earn insufficient income—increased in urban areas from 6.2% to 6.8%, but declined in rural areas to 10.3%. This indicator reflects persistent job quality issues, especially in provinces with low overall unemployment.

The share of university graduates among all unemployed persons fell by 3.6 points to 40.3%, while graduates make up 27% of the total employed population. According to the Statistical Center, the drop in graduate unemployment is mainly due to their absorption into service and technology-related jobs, though their unemployment rate remains above the national average.

Employment among people aged 15 and above saw slight changes: in urban areas, the employment-to-population ratio decreased from 38% to 37.2%, while in rural areas it increased from 39.9% to 40.4%. These figures suggest a relatively stable labor market, with a gradual shift toward services and industry and a continued decline in agriculture’s share of employment.

In summary, the summer of 2025 was marked by a decline in youth and graduate unemployment and growth in the service sector, though underemployment and regional disparities remain challenges. Experts emphasize that active labor market policies and investment in knowledge-based industries will be key to maintaining this positive trend.