The Effects of Minimum Wage on Income Inequality in Iran

Articles in Press

Document Type : Research Article

Authors

1 Associate Professor, Department of Economics, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran

2 M.A. in Theoretical Economics, Department of Economics, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran

10.22034/jepr.2026.145633.1353

Abstract

In the role of the minimum wage in economic and social strategies of governments around the world is seen as an effective institutional policy for reducing inequality and poverty. this policy acts as a tool to redistribute income and to improve labor 's well - being and to ensure the minimum wage for work. however, in the existing empirical literature, its effectiveness in reducing inequality is still questionable; therefore, this study aimed to investigate the effects of minimum inequality on income inequality in iran during the period (1970 - 2024) by using a dynamic ordinary least squares approach to fill the gap of empirical literature on the subject in iran 's economy. key findings indicate that the minimum wage is negative and its square has a positive effect on income inequality. as a result, at first, the minimum wage increases can reduce inequality, but when this increase exceeds the maximum effectiveness, at that point it starts to reverse and thus increases income inequality; so our results indicate a nonlinear relationship between minimum wage and income inequality in iran . other results also showed that gdp has a positive and negative effect on income inequality and consequently, the kuznets hypothesis confirms. also, government size and economic liberalization have positive and negative effect on income inequality. finally, it seems that improving employment policies and increasing the share of government expenditures in social affairs and welfare are appropriate tools for reducing inequality.

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Journal of Economic Policies and Research

Articles in Press, Accepted Manuscript
Available Online from 14 July 2026

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History

  • Receive Date: 20 March 2026
  • Revise Date: 07 July 2026
  • Accept Date: 14 July 2026
  • Publish Date: 14 July 2026

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