In this paper we investigated the long run relationship between formal education expenditures and economic growth and also their influences on each other in Iran and for years 1979-2008. In this purpose vector autoregressive model (VAR) has been used. First, stable of variables by the use of Dickey-fuller test has been examined. Next, analysis of Johnson test for considering the convergence among variables has been used. The results of this research show that the variables Employment divided by population, The initial level of per capita production of employers, employment, physical capital, human capital (Primary and secondary as a percentage of GDP) and human capital (advance education as a percentage of GDP) have a positive effect on real product in Iran.

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