Investing of dynamic effect of immigration from rural to urban on income inequality: case study of rural regions in Iran

Abstract

Today, rural migration to urban areas, leads to an aggregate fall in welfare due to lack of infrastructure for integrating the newcomers into urban settings. Not only does it lead to reduction of the welfare of rural migrants and creation of social problems in urban areas, but it also undermines the welfare of rural residents through increasing inequality in rural incomes. In this paper, we apply the combined data (panel) method and use the generalized momentum econometric model (GMM), to analyze panel rural data of 30 provinces of Iran for the period 2005 to 2015 to see how rural migration affects rural inequality. Our research results show that migration at the beginning increases rural income inequality but that it tends to decrease rural income inequality in subsequent periods.

Keywords

• rural immigration
• income inequality
• panel data
• generalized method of moments