Foreign Trade and Income Distribution: the case of Iran 1977-2007

Subject Areas : Applied Economics

محمد  بابازاده ¹ (مسئول مکاتبات)
صالح  قویدل ² (ندارد)
حسن  عموزاد خلیلی ³ (ندارد)

Received: 2010-03-11 Accepted : 2010-08-01 Published : 2010-09-23

Keywords: Income Distribution, Gene Coefficient, Foreign trade, Export of Oil, Non-oil exports,

Abstract :

This research examines the factors affecting income distribution with emphasis on foreign trade. We investigate the significance of international trade on distribution of income in Iran from 1977to 2007. We begin our study with explanation of the theoretical relationship between foreign trade and income distribution and demonstrate that the economic structure of the country is an important factor in the explanation of the connection between trade and income distribution. Using empirical evidence from Iran, the examination of the link between foreign trade and income distribution, shows that international trade will reduce the income inequality in Iran but the impact is not noteworthy. We also discover that while the non-oil exports have no significant effect on income distribution the export of crude oil increases the income inequality in Iran even though the increase in imports financed by petrodollars has let to an  improvement of the index for income distribution. Furthermore, this study indicates an overall increase in GDP per-capita and its distribution is such that the share of upper income groups has increased relative to those in lower income brackets.