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 Objectives: In designing POVERTY alleviation strategies, it is axiomatic to identify the poor. Insufficient or unreliable data about the deprived members of society is a primary obstacle in designing an effective POVERTY reduction policy. The role of the labour market is particularly important in providing decent jobs for every sector of population. Studying labour market structure enables policymakers to configure more effective targeting policies and social safety nets. Hence, the detailed study of the labour market structure is crucial to assess the POVERTY reduction effects of these privation dedicated programmes because the main source of poor peoples’ income derives from labour services and wages which in turn depends on available employment opportunities. The size and composition of the labour market are rnportant factors that affect the incidence and severity of POVERTY in every society. The dichotomous nature of developing countries – a subsistence sector, mainly located in the rural areas and a more advanced sector in the urban areas - is another barrier to provision of opportunities. Low productivity in one sector is the main source of economic disparity and deprivation. The consequences of this dualism are not restricted to the economic sectors but affect the entirety of social relations and the social fabric. Gender disparity explains another basic barrier to equal opportunity which in turn can be translated into different types of inequalities, including access to education and expertise.Methodology: As it is discussed, many factors shape the POVERTY profile in a developing society, including the place of living, type of employment, gender, and education. The main purpose of this study is to provide a clear picture of POVERTY incidence amongst different subgroups of the population in Iran. To this end, POVERTY within each population subgroup is calculated and decomposed into different socio-economic subgroups. For the first time in Iran, this study links the labour market structure with the socioeconomic characteristics of the rural and urban poor households. Using the 2006 household survey data, the labour force is categorized into three broad segments, public, private and the renter sectors. The public and private sectors are divided into formal and informal ones. Then, heads of household characteristics, including gender and education, are taken into account. This framework is used for both urban and rural areas. In this POVERTY profile CHILDREN in poor families are calculated in each category or group of households.Findings: Results of this study are numerous and far-reaching. The outstanding findings in this abstract are as follows: The composition of the labour market shows that 76% of the jobs are created by the private sector, 20% offered by the public sector and 4% is offered by renters. Almost 50% of the labour force is engaged in the informal sector among which the overwhelming majority is the poor. 40% of the total labour force is active in the informal private sector while 36% of that is engaged with the formal private sector 17 percent of the total labour market lies in the formal public sector and 3% are active in the informal public sector! 10% of the household heads are women and 90% are men. 48.85% of the female household heads live in POVERTY while this figure for the male household heads is 30.35%. The overwhelming majority of the total CHILDREN in POVERTY, 80.58%, live in male-headed-households engaged with the informal private sector while 8.62% of the poor CHILDREN are living in male-headed-households active in the formal private sector. 4.35% of the child POVERTY occurs in the families with the female head active in private sector out of which 4.31% are active in the informal private sector. This picture of POVERTY incidence in Iran lays down an extremely grave set of challenges for the success of any economic reform.



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