Analyzing the Relationship Between Government Size and Unemployment Rate in Iran

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