The Impact of Enfagh on Income Inequality in Iran (A Panel Data Approach)

Enfagh is one of the basic Islamic tools for poverty alleviation and the realization of justice. Therefore, the purpose of this study was to investigate the role of charity on income distribution in Islamic economics with the statistical population of 31 provinces of Iran during the period of 2011-2012 using the panel data econometric method. The results of the research show that the charity score has a negative and significant effect on the Gini coefficient (inequality of income) in the studied provinces. As a percentage increase in the charity, the income inequality decreases by 0.01115 and 0.0065 percent, respectively. Also, unemployment, per capita GDP have a positive and significant effect on the 95% level, labor productivity and per capita gross domestic product have two negative and significant effects on income inequality in Iranian provinces. Therefore, in order to reduce inequalities between different regions of the country, economic officials should take steps to increase charity in addition to policy making and boosting labor productivity