The Impact of Social Security Resources and Expenditure on Economic Growth and Employment in Iran

The importance and impact of social security on economic variables is one of the topics studied in recent years. Most of these studies have examined the impact of social security expenditure on economic variables. While social security is made up of two parts, resources and expenditure, the review and comparison of the effectiveness of both parts should be considered. In this study, the impact of social security resources and expenditure on economic growth and employment in Iran during the period of 1988 to 2020 has been investigated.

This study has investigated the impact of social security resources and expenses on economic growth and employment using the structural vector autocorrelation (SVAR) model.

In response to fluctuations in unemployment insurance resources, it initially increases and then decreases. The response of economic growth to fluctuations in insurance and unemployment insurance expenditures is positive, but the effect of fluctuations in insurance expenditures is greater. Additionally, employment decreases in response to fluctuations in insurance and expenditure resources, but the effect of insurance resources is greater. In response to fluctuations in insurance expenditure, employment initially increases and then decreases, while in response to fluctuations in unemployment insurance expenditure, it initially decreases and then follows an increasing trend.

Increasing social security resources through insurance premiums should be done with high sensitivity so that it does not have adverse effects on growth and employment, especially in the short term. To increase social security resources, attention to unemployment insurance resources can have a much better effect. The coordination of the social security system with the macroeconomic policies in the adverse economic conditions can increase the efficiency of this system in the economy.