Poverty, Growth, and Redistribution: a Study of Iran

The paper examines changes in the extent of poverty in Iran in the period 1983 to 1993. More specifically, it investigates the contributions of growth and redistribution factors to changes in poverty over this period of ten years. The analysis is based on household‐level data relating to three Household Income and Expenditures Surveys of 1983, 1988, and 1993. The study reveals that the extent of poverty in the rural sector declined slightly, whereas in the urban sector it increased significantly. Decomposition of changes in poverty into growth and redistribution components indicates that in each sector the redistribution component was positive, implying that the deterioration of income inequality contributed to the worsening of poverty. The growth component, however, affected the two sectors differently: it contributed to a reduction in poverty in rural areas and an increase in urban areas.