The Effects of Trade Liberalization and Government Size on Employment in Agricultural Sector of Iran

Document Type : Research Paper

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Abstract

Trade liberalization as a feature of globalization provides international competitiveness and contribution of countries to the best economic activities. Of course, in this programmed process, activities that have not suitable competition ability, lose continue their works. This study examined the role of trade liberalization and government in agricultural sector on level employment this sector in vectors time series form in 1971-2006. Effects in long-run and short-run were determined by Autoregressive Distributed Lag and Error Correlation Mechanism. Results revealed that trade liberalization has not significant impact on employment level of agricultural sector in long-run, but has significant negative effect in short-run. Also, the results showed that there was a direct relationship between government size in agricultural sector and employment in long-run. Based on findings of this study, it is recommended to increase agribusinesses along with trade liberalization in order to prevent agricultural unemployment in liberalization process. 

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