The Effect of Social Welfare and Education Government Expenditure on Private Sector Investment

Today, human capital, created through education, is growing at a higher rate than physical capital. In addition, the small and insignificant depreciation of human capital and its longer life than physical capital has caused human capital to grow more and more. Improving the quality of human capital through education boosts production and investment, especially private sector investment. According to imprtance of subject this study examining the effect of social welfare costs and education costs of government on private sector investment over the period 1350-1399 in Iran with using VAR model. convergence vectors estimated with Johansen method. The empirical results show that social welfare costs of government has negative impact and education costs of government has positive impact on private sector investment.