Planning and Budgeting

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This research aims at studying challenges, difficulties and prospects of Irans income distribution sector during 2005-2015 by means of an econometric model. The first part of the paper reviews some theories and empirical accomplishments regarding income distribution in national and international levels. The next part of the paper goes through the trends of income distribution and social welfare indices within the last 20 years. Then a comparative study is presented on income distribution indices between Iran and a selection of developing and developed countries. Afterwards, on the basis of previous part studies, an econometric model is designed with the aim of explaining behavior of inequality indices, i.e. Gini Coefficient, lower decile to upper decile ratio, lower 20 % to upper 20 % ratio, and social welfare indicator within 1971-2001 as well as making projections needed. Then, making use of the model and Irans 4h development plan assumptions, which are actually exogenous variables of the model, the prospects of the income distribution sector are presented within 2005-2015 in three options, i.e. continuation of the present status, economic growth by 7 % , and economic growth by 8.6 %. Next, basic problems and challenges in the field of income distribution are studied. Finally, policy solutions and the requirements to betterment of income distribution and social welfare are offered through the use of the results gained from the model.

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