Problem Design: The existence of massive inequality in income distribution results in poverty and increasing its scope, since for a given level of economic growth, high inequality in income distribution gives rise to creating more gaps among social classes and expanding poverty. So, policy-makers use some instruments including insurance, minimum wage determination and taxing in order to correct income distribution along with economic growth goals. From early 20th century until 1950s, most economists paid attention to increasing economic growth, however, after 1950s especially from 1970s they emphasized on increasing the quality of life with regard to widening income gap among the poor and the rich and also development in public insights. This issue was accompanied first in the rich countries by changing of work laws in favor of labor, providing the considerable welfare services to workers, increasing tax on capital owners and the rich classes and offering social insurances for less income people. Thus, from this viewpoint, the equilibrium generating in income distribution models has become one of the government aims in economic policymaking. Our goal in this paper is to show whether social insurance is an effective instrument to decreasing inequality. In other words, what changes in income distribution occur because of changes in insurance levels? Method: Insurances such as unemployment insurance, retirement insurance, life insurance and so on, can play an important role in and also affect on income and facilities distribution in the society. In this paper, with reference to existing data and information, the relationship between social insurances and income inequality in Iran is explained using estimation of regression models. Findings: the findings indicate that the Kuznets hypothesis has been violated in Iran. Also, the received premiums of life and non-life insurances result in decreasing inequality. On the other hand, the effect of life insurances on decreasing income inequality is far more than the effect of non-life insurances. The suggestion of current paper for decreasing income inequality and its appropriate distribution is to use the other suitable instruments along with social insurances. Results: The main purpose of this paper is the study of the relationship between income inequality and social insurances in Iran during the period over 1344- 1384. To get this end, after literature review on income inequality and social insurances we construct a model on Kuznets hypothesis base. The results show that promotion of social insurances including life and non-life insurances reduces the incomes inequality. The impact of social insurances on inequality is significant but negligible. In any way, this small effect of rising social insurances on decreasing inequality should not be ignored, since this small effect is important for attaining to optimal income distribution.
Objective: Existence of positive relationship between on the other hand, income distribution and macroeconomic variables such as productivity and economic growth, and on the other hand undesired impacts of unfair distribution of income on social variables including crime and delinquency, has caused [fair] distribution of income to be one of the most important macroeconomic goals of governments. Hence, it is one of policy-makers' main concerns and has obtained a special stand in socio-economic planning. In this regard, economic policy-makers are interested in explaining the relationship between income distribution and macroeconomic variables so that they can help the economy to achieve proper distribution of income through identification and control of influencing variables. Economic literature suggests that increasing the minimum wage is a potential way of improving low-income workers' level of living and decreasing income inequality. Increase in the minimum wage level has been one considered problems in Iran during the recent years. In fact, it has become a main economic challenge which has always laid huge costs on government and society. Therefore, knowledge of the relationship between minimum wage and inequality is necessary for government to decrease the mentioned costs. Hence, an essential question proposed for Iranian economy is," How is the relationship between the increase in minimum wage level and income inequality?" The main goal of this article is to analyze the effects of minimum wage on income distribution in the economy of Iran. Methodology: We use an econometric model based on Kuznets Hypothesis to study the effects of minimum wage on distribution of income. For this purpose, annual time series of Iranian economy for the period 1969 to 2005 have been used. Using seven different models, the effects of nominal and real minimum wage on income distribution were estimated with Ordinary Least Square (OLS) method. Finally, the appropriate model was chosen according to goodness-of –fit and robustness criteria. Findings:The literature suggests that the effects of minimum wage on distribution of income are vague, though most of theories believe that increase in minimum wage can lead to decrease of income inequality. Empirical findings suggest that over the period from 1969 to 2005 in Iran: a) The Kuznet's hypothesis implying the presence of an inverted-U shape relationship between income distribution and per capita income is not rejectable. b) Increase in real minimum wage level in Iran has decreased income inequalities significantly in such a way that the interval of minimum wage effects on Gini coefficient has been estimated from 0.017 to .018. Therefore, we can argue that the minimum wage has been among key influencing variables on income distribution in Iranian economy. c) Increase in minimum wage levels not only has not have negative inflationary effects, but also has decreased inflation through improving labor productivity and thereby has improved the distribution of income. Although little, these effects have been statistically significant. Conclusion: The main policy implication of this research is that Iranian government can decrease income inequalities significantly besides keeping workers' purchasing power in inflations through an increase in real minimum wage levels without any serious worry about negative inflationary consequences. Of course, the government can adopt other policies besides increasing minimum wage levels including appropriate selection and implementation of other complementary supportive policies, extending social supports (creating efficient social security system), empowering workers through educating and training them, and creating a proper and efficient tax system.
Research Problem: Economic growth and development is a complicated process that falls into the domain of many disciplines in social sciences andhumanities. Therefore to study these fundamental aspects of economic growthsynthesizing in these fields is necessary. In this research using endogenousgrowth models and political literature, we present a model for political economyof growth. The main question that this study is going to answer is the relation
between democracy and economic growth. There are some well knowndocuments that have studied the relationship between democracy and economicgrowth in the literature in this area. Because of ambiguous results of them, it isneeded to test the relationship by using new data and methods.
Method: to test the relation between democracy and economic growth, using panel data of 62 countries in the period 1980-2000 in this paper we study theeffects of democracy on economic growth through fixed effects model. Tomeasure democracy index, we use a mixed variable which includes political andfreedom rights. Per capita GDP growth is used to measure economic growth rate.Stata8 and Eviews5 software are used to get econometrics results.
Concluding remarks: Despite of a lot of studies that focus on the negative effects or inefficiency of democracy, we find the positive and significant effectsof democracy on economic growth.We also come to this conclusion that economic growth negatively is related tothe inflation, interest groups, and government consumption on the other hand itis positively related to the human capital, investment, population growth, femalelabor force, and active population.
Conclusions: according to results, we conclude that any improvement in the democratic institutions is required to have significant economic growth. Also, tocatch higher economic growth, education enhancing, democratic institutions,reduction in government intervention in economy, investment and increasing in female labor force participation can be helpful.
JEL-code: O40 O57 O41 Q20 Q30
Introduction: Poverty is one of the most dangerous social phenomena which could threaten economical, political, and cultural life of the nation. Considering that the incidence of poverty in developing countries is widespread and severe, paying lots of attentions seems necessary. On the other hand, corruption is a cause of poverty and it is a barrier for the successful eradication of poverty and may be with prevalence of corruption efforts for reducing the poverty is inconclusive as well as unlikely. The phenomenon of corruption is a persistent obstacle for efforts made by countries in the fields of politics, economy, and society to achieve their desired goals. Studies have shown that corruption exists in all countries, even in many developed countries. But this phenomenon in some developing countries where the structures are weak and vulnerable, is far more harmful Because It has devastating effects on property rights, regulation and investment incentives and it Could reduce economic growth and thus Poverty expand over time. However, the poverty could be a cause of corruption..
Method: Therefore, this study is set out to investigate the Granger causal relationship between corruption and Poverty. It uses dynamic panel system GMM estimators, focuses on capability poverty by using human poverty index (HPI) since it portrays in a more accurate way the state of poverty, and is based on a sample of 120 developing countries during 1998-2006.the empirical findings suggest that corruption and poverty come together, with causality running in both directions.
Findings: Poverty is associated with corruption in various ways and although the link between corruption and poverty is often noted, the question of whether a causal relationship between corruption and poverty (based on panel data models) exists or not, has received less attention. In other words, Most of the studies which have investigated the link between corruption and poverty may draw conclusions on causality in the form of models that only show correlation. Thus, the policy recommendation for fighting against poverty and corruption can simply be wrong.
Conclusion: All in all, it is necessary to address the integrated strategy to reduce poverty and fight against corruption. In other words, the attempts to reduce poverty must be complemented by serious efforts to reduce corruption.Page 1 from 1 |
Social Welfare Quarterly
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