Socio-Economic Inequalities in Rural and Urban Areas in Iran (1966-2006)

The purpose of this article is to compare the situation of Iran’s rural-urban divergences during the period of 1966-2006. In order to this, several inequality indicators such as Sophere’s index (SI) and Gini coefficient have been employed. Moreover, an autoregressive distributed lag (ARDL) model has been estimated. Obtained results revealed that, urban and rural areas experienced two different periods in this regard. In the first period (1966-1976) city and countryside tended to diverge, so that the socio-economic conditions of the residents in these areas were completely distinguishable from each others. In the second period (1976-2006), which coincided with the upheaval of the Islamic Revolution, rural-urban disparities clearly exhibited a decreasing trend in terms of the majority of the selected indicators. Findings from the estimated model indicate that industrialization and urbanization of the country caused diverging the two areas. Meanwhile, agricultural growth and the Islamic Revolution contributed converging rural and urban areas. At least, two strategic policies affected to faster improvement in the socio-economic conditions of rural residents than that of urban residents; the first one was the emphasis of the state on the pivotal role of agriculture activities in the economic development plans of the country. The second one was pursuing social justice policies by the state throughout the post-revolutionary period. Meanwhile, there is a notable gap between these two areas from the point of view of socio-economic satisfaction yet.