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Introduction: Neoliberals claim on the necessity of falling back and decreasing the social security costs basically relies on this argument that in the current situation which the world system is increasingly moving toward globalization, such costs cause damage to a country`s economic and social conditions, and decreasing social security costs and receding from welfare state are the necessary, if not sufficient, conditions for any country to develop. This viewpoint completely disagrees with classic’s (who defend welfare state) who believe social security costs is the necessary condition to improve welfare of people and to ensure fair distribution of incomes. This research is going to test these two contending theories in Iran. Method: To analyze the relation between socio-economic development and social security in Iran and to test hypotheses derived from theoretical frameworks, considering official statistics published by relevant institutions and organizations, regression analysis and Pearson correlation coefficient tests used to examine and test the mentioned hypothesis. Finding: The results of applying different regression models show that on the one hand, the costs of social security has had positive effect on economic growth in Iran but it`s effect is less than job and capital’s, and on the other hand, social security development is associated with a decrease in poverty but its effect has not been significant because of budget constraint and stronger effects of factors such as inflation. Conclusion: any attempt to quantitative and qualitative expansion of social security should be in such way that in addition to invest on the development of the job and capital resource, policy makers should pay more attention to insurance development.

Keywords: Domestic Gross Product, Income distribution, Social security, Socioeconomic development.

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