Economic Growth of Transportation and Communication Sector and Income Distribution in Iran

Economic growth may result in inequality. Empirical evidence shows that in many countries economic growth generally leads to inequality. There is a need consider this topic in our country as well. The basic question in this paper is that economic growth in transportation and communication sector, which provides equal conditions and access to competitive opportunities for all segments, can lead to economic growth with the proper distribution of income? The results of this study, using data of the years 1969-1995 indicate that economic growth resulting from transportation sector, is associated with reduced income inequality. In addition, the strategic location of transportation sector in the region and also Iran's transportation network has a lot of potentials that can basically reduce inequality between urban and rural areas.