Income Inequality Convergence among Iran’s Provinces: Finding New Evidence Using Parametric and Nonparametric Approaches

The income inequality convergence is the second part of neoclassical growth theory. The hypothesis predicts that income inequality among countries/provinces/regions disappear over the time. In this paper, the income inequality convergence is investigated among Iran’s provinces over the period 2000–2015. For this purpose, we employed parametric approach (GMM-system estimator of dynamic panel data model), and non-parametric approach (distribution dynamics). The distribution dynamics approach indicated that the Gini index of Iran’s provinces were converged toward unique steady state about 0.3, and the results of absolute β convergence hypothesis indicated that the Gini index of Iran’s provinces moved halfway to the steady state in about 17 years after 2015.