The Rise and Fall of Top Incomes in Iran 1985-2015

Abstract

T his paper studies top income shares in Iran, using 26 Household Expenditure and Income Surveys conducted by the Statistical Center of Iran over the period 1985-2015. It is shown that after the imposed Iran-Iraq war, top income groups were raising their real income and income share by 2006; however, both their share and real income fell immediately after 2006 such that the numbers are now below their wartime level. It is explained that the fall is caused by the negative effects of the United Nations Security Council sanctions on the top capital income earners. The paper also measures the concentration of income by the inverted Pareto coefficient and finds that the concentration had been generally increasing by 2000; however, the upward trend reverses from 2000 onwards. Although the concentration of income and the top income groups’ share have fallen significantly in Iran in recent years, the numbers are still large, and Iran is among the most inegalitarian countries.