The Relationship between Income Inequality and Economic Growth in Urban and Rural Areas of Iran: Application of

Authors

• S .A . Mortazavi
• F. Seraj Zadeh
• M . Shokohi

Abstract

In the literature of development economics there are two well known propositions about poverty reduction. (i); poverty can be reduced by promoting economic growth and by improving income distribution. (ii); increasing economic growth may worsen income distribution. This study attempted to investigate the relationship between inequality income and economic growth in urban and rural regions using Kuznets curve during 1980-2007 period. The results showed evidence of the inverted N-shaped relationship between per capita income and inequality of income in rural regions while, there was N-shaped relationship between per capita income and inequality income in urban areas. Also, increment in per capita income by 1 percent increased inequality of income in urban and rural areas by 0.44 and 0.41 percent respectively. JEL Classification : D63، R11
 

Keywords

• Economic Growth
• income inequality
• urban and rural regions

20.1001.1.20086407.1390.3.9.9.4

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