Poverty and Income Inequality in the Islamic Republic of Iran

This paper examines the record of the Islamic Republic of Iran in reducing poverty and income inequality, important populist promises of the 1979 Revolution. Using data from 32 years of income and expenditure surveys, I describe the trends in poverty and income inequality during the past three decades, and offer explanations of their major changes. These trends reveal two important facts about the post-Revolution record in improving poverty and income inequality. While there has been significant progress in reducing poverty, little progress is observed in improving income inequality. Poverty reduction has followed a substantial redirection of public investment toward poorer areas and cash assistance. The two periods of improvement in income inequality correspond to a decline in oil revenues and a loss of income at the top (the 1980s), and to a large cash assistance program starting in 2011.