Investigation of the Effects of Government Macroeconomic Policies on the Development of Employment in the Agricultural Sector

Agricultural sector is one of the most important sectors of the country regarding both economic and employment development. This sector which is influenced by macroeconomic variables and policies interacts with other sectors importantly. In this regard, this study was conducted to investigate the short-term and long-term effects of government macroeconomic policies on the development of employment in the agricultural sector. Macroeconomic variables including inflation rate, exchange rate, money supply, and government expenditures were studied in the period between 1991 and 2016. Furthermore, ARDL (Autoregressive Distributed Lag) was used to investigate the short-term and long-term effects of these variables. Findings revealed that in the short-term, exchange rates and liquidity had positive effects on employment in the agricultural sector, while the effects of government spending and inflation rate were negative. The situation of the long-term effects was the same as the short term effects. But the difference was that the elasticities were greater, and this is logical, because economic policies, especially monetary policies, have higher external delays.  In other words, its effects on the economic variables will be revealed with a time interval and in a period of several years. Therefore, according to the results of the present study, the government policies to increase employment in the agricultural sector should include controlling inflation, managing exchange rates, increasing liquidity and expanding monetary policy and liquidity guidance for investment in the agricultural sector as well as applying expansionary fiscal policies in the form of government investment in the infrastructure affairs, agricultural production, and supportive policies.