Document Type : Research Paper
Faculty of Economics, University of Tehran, Tehran, Iran.
This study analyzes absolute and conditional income mobility in Iran using pseudo-panel data constructed from 22 cross-sectional Household Surveys of Income and Expenditures conducted by the Statistical Center of Iran between 1999 and 2020. The findings indicate that households with below-average income experienced faster income growth than households with above-average income, suggesting income convergence over the past two decades. However, it is important to note that some of this convergence may be attributed to international sanctions imposed between 2007 and 2014. These sanctions resulted in reduced income across all income groups, particularly affecting the top-income groups. Consequently, there was a significant decrease in income disparity between the wealthy and the poor, potentially leading to an inflation of measured income mobility. Absolute mobility is found to be high in both total income and total expenditures. Individuals displayed considerable mobility around their fixed effects, demonstrating a quick recovery from negative income shocks and low initial income endowments. Urban areas exhibited higher income mobility than rural areas.