Vol. 7, Issue 1, Part I (2025)

The objective of this study is to measure the impact of fiscal policy variables on unemployment rates in Iraq for the period (2004-2023). The research aims to explore both fiscal policy and unemployment, as well as to assess the effect of fiscal policy variables on unemployment rates in Iraq during the specified period. The researcher reached several key conclusions, the most important of which is that government spending affects unemployment rates in the short term by stimulating aggregate demand through increased income for public sector employees. This, in turn, boosts consumption and investment, encouraging businesses to expand and hire more workers. Additionally, spending on public projects (such as infrastructure, healthcare, and education) leads to increased demand for labor in targeted sectors and creates new job opportunities, thereby reducing unemployment.

The main recommendations provided by the researcher include urging fiscal policymakers to focus on sustainable government spending that is not financed by debt, as debt-funded expenditure may lead to higher taxes or inflation, which could negatively impact employment levels in the long term. Adopting a balanced and sustainable fiscal policy grants the economy greater stability and investor confidence, ultimately supporting employment in the long run.