The Impact of Social Security Expenditures on Convergence of Social Welfare in Provinces of Iran

Document Type : Scientific paper

Authors

1 PhD Student, Department of Economics, Firoozkooh Branch, Islamic Azad University, Firuzkuh, Iran.

2 Assistant Professor, Department of Economics, Firoozkooh Branch, Islamic Azad University, Firuzkuh, Iran.

3 Associate Professor, Department of Economics, Firoozkooh Branch, Islamic Azad University, Firuzkuh, Iran.

Abstract

This study aimed to investigate the effect of social security expenditure on the convergence of social welfare in provinces of Iran. Results of estimating models, using Spatial Econometrics, revealed that social security expenditure has a positive and significant effect on the convergence of social welfare in provinces of Iran during the period 2006-2020. Moreover, findings demonstrated that  direct and indirect effect of social security expenditure is also positive, in the sense that the increases in social security expenditure has not only improved the convergence of social welfare in all provinces, but its spillover effects have also  improved the convergence of social welfare in neighboring  provinces on average. Besides, the Absolute Convergence Rate was 0.053 and in the conditional models, its’ values were estimated to be  0.054 and 0.059, respectively. These findings show that the estimated Conditional Beta-Convergence Rate  is higher while considering social security expenditures. Additionally, results revealed that the Misery Index and the Government Size have a negative and significant effect, while the Information and Communication Technology (ICT) and Human Capital have a positive and significant effect on the convergence of social welfare. Finally, an estimation of the Spatial Spillover Effects of social security expenditures in 2019 showed that each one of the provinces has the highest direct effect coefficient on itself, and then has the highest effect on neighboring provinces.

Keywords

Main Subjects

References

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Macroeconomics Research Letter
Volume 16, Issue 32
December 2021
Pages 117-145

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History

  • Receive Date: 21 August 2022
  • Revise Date: 20 September 2022
  • Accept Date: 02 October 2022

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