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Why did many Tehran residents work for the government before privatization in the 1990s?
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Tehran
Mosque with cupola in the bazaar, Tehran.
Before the wave of privatization in the 1990s, nearly one-half of working Tehranis were employed by the government. This high level of public-sector employment was a direct result of the revolutionary nationalization of banks and many large private firms, which caused the public sector to grow dramatically.1
As earnings from the oil industry were circulated throughout the economy, they were used to support a large public sector and various unproductive activities. Consequently, the majority of Tehran's population became dependent on public-sector resources, either through direct government employment or through the services that supported those workers.1