Investigating The Effect of Education Inequality on Inequality of Income Distribution in Iran’s Provinces

Inequality of income distribution is one of the socio-economic issues of developing countries, including Iran. One of the proposed solutions to deal with this phenomenon is to reduce educational inequality. The purpose of this study is to investigate the effect of educational inequality on income inequality in the provinces of the country during the years 1380 to 1394.

In this study, fifteen-year historical data of Iranian provinces were used to achieve the goal by combined method. Gini coefficient data of education and education were collected from the yearbook of the Statistics Center of Iran and Mohaghegh Calculations and other data were collected from the Program and Budget Organization of each province .Income inequality was considered as a dependent variable and the educational inequality, the share of tax revenue from GDP and per capita income without oil were considered as independent variables. The model was estimated and analyzed using the generalized torque technique and Eviews software.

The estimation of the model showed that the effect of educational inequality on income inequality is U-shaped. That is, the first interval of educational inequality had a negative and significant effect on income inequality and the second power of the first interval of educational inequality had a positive and significant effect on income inequality. Also, the first interruption of government size had a positive and significant effect on the income inequality index, and the interruption of per capita income and the interruption of the share of provincial GDP tax on income inequality of Iran's provinces was negative and statistically significant.

Increasing educational inequality has reduced income inequality in the provinces of Iran over a period of fifteen years. The impact of educational inequality from the threshold of 0.44 onwards has been on increasing income inequality. This means that educational inequality has increased income inequality (Gini coefficient) beyond the threshold.