Document Type : Research Paper

Authors

• Ebrahim Ali Razini ¹
• Amir Reza Soori ²
• Ahmad Tashkini ³

¹ Associate Professor of Economics, Islamic Azad University, Karaj Branch

² Ph. D student in Economics

³ Ph. D in Economics, Tehran University

Abstract

This study investigates the relation between unemployment rate and
Government Size in Iran. For that, we have used some VAR models,
which include the following variables: government size, measured as
total government outlays as a percentage of GDP, unemployment rate,
real GDP growth rate, Inflation rate, minimum wage. Our results show
that an increasing in the Government Size would raise unemployment
rate, and an increasing the GDP growth rate and Inflation rate would
reduce unemployment rate.

Keywords

• Unemployment Rate
• Government Size
• Vector Autoregressive Model (VAR)
• Total Government Outlays
• JohansenJuselius