Economic Growth Resources and Income Distribution in Iran

As Iran’s fifth Development plan emphasis on growth through productivity and inequality decrease، in this study the relationship between economical growth resources (considering the ratio of factors and productivity) and income distribution has been analysed and try to answer the questions like whether the growth resulted from the factors'' productivity leads to balanced distribution of income. By changing the relative share of labour، will labour''s income move in the same direction and income distribution act the same way or not? Through which production factor، the income distribution will become equal? By analysing the existing situation and reviewing previous studies، the Error-Correction Model and lagged depend variable model for time series information during (1974-2007) has been utilized. The study indicates that the function of income distribution system is not based on the relative factors out of production. The determining role of capital in production fluctuation caused that additionally of other production factors all production factors be under the authority of highly income group and labour force. Moreover the growth based capital in the existing structure and mechanism of income distribution leads to income equality which proven to previous studied. Considering the fifth Development plan''s emphasis and the growth based productivity، the existing mechanisms and structures، has increased the income distribution inequality. So our study emphasizes on the reform of the existing structures and process in the capital and labour market.