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Mobility and the dynamics of poverty in Iran: Evidence from the 1992–1995 panel survey

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  • Salehi-Isfahani, Djavad
  • Majbouri, Mehdi

Abstract

In the last three decades, revolutionary Iran has experienced large shocks to its political and economic system with likely effects on poverty, inequality, and economic mobility. While poverty has declined, inequality has remained relatively high and stable over nearly four decades. In this paper, for the first time, we examine poverty and inequality in a dynamic context using a 4-year panel data, collected during 1992–1995. We show that short-term income mobility is relatively high, which helps mitigate persistent high inequality. We offer a range of estimates of transition probabilities, indicating that, for example, someone in the lowest (highest) quintile has between 25% and 50% chance of moving up (down) the income ladder. Focusing on the dynamics of poverty, we distinguish between short- and long-term poor and between chronic and transient poverty. Surprisingly, we find that chronic poverty is a more serious problem in urban than rural areas, while transient poverty is geographically more uniformly distributed. Finally, using Tobit and quantile regression, we examine the correlates of these two types of poverty. Both chronic and transient poverty are higher for households headed by women and by younger and less educated men. While minorities suffer more from transient poverty, they are less likely to be chronically poor. We discuss the implications of these findings for policy to alleviate chronic and transient poverty.

Suggested Citation

  • Salehi-Isfahani, Djavad & Majbouri, Mehdi, 2013. "Mobility and the dynamics of poverty in Iran: Evidence from the 1992–1995 panel survey," The Quarterly Review of Economics and Finance, Elsevier, vol. 53(3), pages 257-267.
  • Handle: RePEc:eee:quaeco:v:53:y:2013:i:3:p:257-267
    DOI: 10.1016/j.qref.2010.04.001
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    Cited by:

    1. Ali Asadi & Gianni Betti & Francesca Gagliardi & Hossein Khoshbakht, 2018. "Multidimensional and fuzzy poverty at regional level in Iran," Department of Economics University of Siena 796, Department of Economics, University of Siena.
    2. Mahdi Majbouri & Sanaz Fesharaki, 2019. "Iran’s Multi-ethnic Mosaic: A 23-Year Perspective," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(3), pages 831-859, October.
    3. Sanaz Fesharaki & Mahdi Majbouri, 2016. "Iran's multi-ethnic mosaic," WIDER Working Paper Series 117, World Institute for Development Economic Research (UNU-WIDER).
    4. Amanzadeh, Naser & Heydari, Mohammad Sadra, 2023. "Absolute intragenerational income mobility in Iran," The Quarterly Review of Economics and Finance, Elsevier, vol. 90(C), pages 38-50.
    5. Tingting Li & Hualou Long & Shuangshuang Tu & Yanfei Wang, 2015. "Analysis of Income Inequality Based on Income Mobility for Poverty Alleviation in Rural China," Sustainability, MDPI, vol. 7(12), pages 1-17, December.
    6. Abbasi Hossein A. & Karimi Seyed M., 2017. "Children’s Gender and Men’s Income: Evidence from Iran," Review of Middle East Economics and Finance, De Gruyter, vol. 13(1), pages 1-19, April.
    7. Stefan Dercon & Joseph S. Shapiro, 2007. "Moving On, Staying Behind, Getting Lost: Lessons on poverty mobility from longitudinal data," Economics Series Working Papers GPRG-WPS-075, University of Oxford, Department of Economics.

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    More about this item

    Keywords

    Iran; Poverty; Mobility; Income distribution; Panel data;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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