---

Objective: The relationship between fiscal policy and income distribution is a challengeable subject especially as public welfare is concerned. This paper has investigated the impact of fiscal policy and gas price on income distribution in Iran. It goes without saying that in an economic system like Iran in which oil revenue does have the most impact on, this case would have crucial role. Also in Iranian economy government sector intervention is huge and extensive therefore, economic policies (especially fiscal policy) could change the existent situation. Therefore, measuring the impact of fiscal policy is very conclusive. Method: firstly and generally speaking, the analytical-descriptive method is used in developing this paper. Secondly, the econometric method and especially, auto regression model is used along with time series data for 1353- 1384 period. Findings: a) Gini Coefficient has declined from 49.92 to 43.60 during 1353-1357 periods. b) During 1357-1367 3-periods, we observe a considerable amount of fluctuation in Gini coefficient. c) Gini has achieved to 40.43 at the end of 1367. d) During first development program (1368-73) second (1374-78) and third development program (1379-83), Gini has not changed considerably. Results: Gini Coefficient has decreased during 1353-57, has associated with fluctuation on 1357-67 period and has remained almost constant during 1379-1384. Therefore, this coefficient is still showing the inequality in Iranian economy. The final finding is that expansionary fiscal policy has increased the inequality in Iran, however increasing the gas price has declined inequality in it. Of course, enhancing the gas price is recommended if and only if other preliminary conditions for holding the minimum social welfare are satisfied. So the final suggestions of our paper in order to resolve some dimensions of inequality in Iranian economy would be: 1-government intervention, especially in fiscal policy (especially regarding income distribution and social welfare), should be disciplinized seriously. 2- gas pricing other things being equal,(among which are well organizing of public transportations , efficient, just taxing system and providing minimum standard of social security), should, be left to the efficient market framework

---

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.

---

 

intorduction: Subsidy policy has been one of the most challenging economic policy, especially after1970s.Current Iranian government claims that it has started the reforming policy in connection with subsidy plan from December 2011.Although reforming policy is theoretically urgent and helpful policy for all including Iran ,to achieve its goals it requires a comprehensive infrastructural package. Implementing such policy incautiously, could be problematic. Lack of the above package in Iranian experience under recent and current government (2005-2011) is going to endanger usual and positive outcomes of subsidy policy. Considering the above concern, this paper is investigating the case in question.

 

Method: after some literature review it is based on econometric methods and it uses time series data 1974-2011 periods (by assistance of auto regression model).

 

Findings: 1-Gini coefficient and general indicators of welfare show that there is a high inequality in Iranian economy in the period of this study. 2-regarding current administration, the subsidy policy would worsen the income distribution, and in long run social welfare.

 

Conclusion: Given the current administration and due to inefficiency of basic infrastructures of policy itself, subsidy policy would worsen the income inequality, and thus from social welfare point of view, it doesn’t work in its consistent and efficient framework.