Examining the Impact of Economic Growth on Income Distribution in the Iranian Economy: Application of Generalized Method of Moments (GMM)

Authors

  • Seyed Fakhreddin Fakhrhosseini * Department of Accounting, Management and Accounting faculty, Islamic Azad University Tonekabon Branch, Islamic Azad University, Tonekabon, Iran.

https://doi.org/10.22105/tqfb.vi.58

Abstract

Multiple factors can influence income distribution, making it crucial to identify these factors and examine their effects. This study aims to analyze the impact of economic growth on income distribution in Iran by utilizing the Generalized Method of Moments (GMM) approach with data from 31 provinces of the country between the years 2006 and 2022. The results indicate that per capita government current expenditures and per capita subsidies have a negative and significant effect on the Gini coefficient. Additionally, the findings reveal that per capita Gross Domestic Product (GDP) positively affects the Gini coefficient. Furthermore, the unemployment rate demonstrates that higher unemployment is associated with greater income inequality. According to the results of this study, per capita bank facilities and the inflation rate have a positive impact on the Gini coefficient. The findings also show that direct taxes have a positive effect on the Gini coefficient, while the effect of indirect taxes per capita on the Gini coefficient is significantly negative. Additionally, the impact of wealth tax on the Gini coefficient is found to be significantly positive. Conversely, the taxes imposed on corporate income and on goods and services have a significantly negative effect on the Gini coefficient.    

Keywords:

Economic growth, Income distribution, Generalized method of moments

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Published

2025-08-06

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Fakhrhosseini, S. F. (2025). Examining the Impact of Economic Growth on Income Distribution in the Iranian Economy: Application of Generalized Method of Moments (GMM). Transactions on Quantitative Finance and Beyond. https://doi.org/10.22105/tqfb.vi.58
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