Impact of Government Size on Employment in Iran

Given that the role of government is crucial in Iran’s economy, therefore, clarifying the role of government size employment can be very important; especially from the aspect that public sector in the economy is considered as a competitor to the private sector. The aim of this study is to investigate whether the government could have had an impact on employment in Iran during 1970- 2011. Since identifying short and long-term relationships in this research is important, therefore, necessary analysis is performed by ARDL model analysis, using Eviews Software. The results show that government size has a positive impact on employment in short-term and long-term.