The effect of social capital on income inequality in Iranian Provinces

The purpose of this paper is to investigate the effects of social capital on income inequality in Iran's provinces. For this purpose, the country's provincial data have been used during the years (2013-2019). In this study, we used the Panel GMM method to estimate the relationship between social capital and income inequality. The results suggest that increasing social capital can help improve income inequality in Iran. In simpler terms, increasing social capital can help make income distribution more equitable in Iran. According to the results of this study, any 10% increase in social capital in the country can reduce 3.9% of inequality in income distribution. It is interesting to know that among the variables of inflation, unemployment rate, tax revenue and social capital, the variable of social capital has had the greatest impact on the inequality of income distribution in the country. Therefore, it is recommended that governments make more efforts to increase social capital. To this end, governments must be considered to strengthen social capital, strengthen cultural and social infrastructure, promote participatory incentives, and increase the sense of patriotism and economic well-being of the people.