Technology and wages are important factors can be effective on the labor force demand. This paper tries to apply the effect technological change and wages (compensation) on labour demand in Iran. To achieve this goal, the combined input-output model with demand function model of labour. For this purpose, we used panel data approach and input-output tables in the years 1365, 1370, 1380. The estimation results using fixed effects approach showing that positive and significant coefficient of technology on employment and it is consistent with the theoretical.

JEL Classification Codes: O33, C51, C67, R15