Poverty, Inequality, and Income Mobility in Iran: A Pseudo-Panel Approach

Abstract

Iran has experienced various social, economic, and political upheavals and structural changes over the past four decades. These have included an Islamic Revolution, an imposed war, economic sanctions, a series of demographic transitions, and rapid fluctuations in oil revenues. Various economic and political developments have arguably had differential influences across generations and stages of life—hence, a variety of welfare conditions experienced by different age groups. In this chapter, we look at the dynamics of income distribution among and between generations over the last three decades. We specifically probe poverty, inequality, income mobility, and vulnerability associated with various generations. Major questions to be answered in this chapter are thus as follows: What is the behavior of consumption expenditure for different age groups and how has it changed through the years? How do poverty and inequality change among different generations according to gender and educational attainment of the household head? What is the speed of income convergence and are households able to improve their standing after negative income shocks? What are the effects of the unemployment rate as an important factor influencing consumption expenditures? Have younger generations faced greater rates of unemployment compared to the age groups who lived their youth prior to the Revolution? Which household characteristics have influenced the vulnerability rate?