Economics Research

Analyzing the Relationship Between Government Size and Unemployment Rate in Iran

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

  • Receive Date 27 October 2009
  • Revise Date 14 May 2010
  • Accept Date 04 August 2010

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