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Self-employment is a crucially important subject in an economy, especially for a country with high unemployment rate. This paper studies the determinant factors of self employment in Iran during 1996-2006 using a panel data method. The results show that unemployment rate per province, the ratio of 15-65 age bracket to total population of the country, and the share of each province to total GDP aren't statically significant. While the ratio of urban population to total population for each province has a negative coefficient in self-employment equation, the ratio of R&D expenditure to GDP and literacy rate has a positive one.

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The impact of social security expenditure on the labor market (wages and employment) has been regarded in economic researches. This paper evaluates the short-run and long-run effects of social security expenditure on wage and employment using Autoregressive Distributed Lags (ARDL) approach during 1979-2007. Our findings indicate that the insurance contribution deductions from the employees have negative impact on the real wage in both short-run and long-run and decrease their purchasing power. Moreover, employer's social security expenditure has a negative but insignificant effect on employment. In addition, labor productivity and economic growth are the main factors affecting the labor market.