Income inequality and life expectancy in Iran

Abstract

Objective (s): The aim of this paper was to assess the relationship between income inequality and life expectancy in Iran from 1971 to 2010. Method: The Johansen-Juselius method was used for theoretical analysis. Results: The results indicated that the coefficients of all variables are significant based on theoretical foundations. Findings showed that, in the long run, 1% increase in the income inequality decreases the life expectancy by 0.24% and 1% increase in the number of doctors, literacy and GDP per capita lead to respectively, 0.08, 0.08 and 0.007 percent increases in the life expectancy. Also, the results based on error correction model indicated that to achieve long-term balance, about 0.01 adjustment of short-run imbalance was needed for each period. Conclusion: The study indicated that income inequality adversely was associated with life expectancy. Indeed the economic policy makers and government should strive to reduce income inequality.

Keywords

• life expectancy
• income inequality
• co-integration
• johansen-juselius method