The Effect of Macroeconomic Variables on Income Distribution in Iran (with Emphasis on Targeted Subsidies)

Investigating the effects of economic policies on income distribution is very important in different countries from the viewpoint of social justice. The effects of macroeconomic factors on income distribution are of major concern to economists and have critical policy implications. One of the most important goals of the Sixth Development Plan is achieving to Gini coefficient of 0.34. The aim of this study is to investigate the impact of macroeconomic variables including inflation rate, government expenditures, oil and tax revenues and also targeted subsidies dummy variable on income distribution during 1986 to 2015 via a logarithmic model, using Eviews software and OLS method. The findings show that all independent and dummy variables in this study have statistically significant impact on Gini coefficient. The variables of the inflation rate and government expenditures have a significant and positive impact while the oil and tax revenues and targeted subsidies variables show a significant and negative impact on Gini coefficient.