Survey of relationship between income inequality, human capital and productivity in rural areas of Iran

In economic development literature, there is a relationship between productivity growth and income inequality and this is referred to as Kuznets inverted U. In other words,in first stages, there is a direct relationship between productivity growth with income inequality but later this relatioship becomes reverse. Nowadays, economists’ studies show that government policies including investment in human capital and research and development expenditures, not only have an effect on economic growth and productivity, but also they affect the proper distribution and reduction of income inequality. Accordingly, the structural factors cause Kuznets curve bends back quickly and with increasing the productivity, income inequality reduces. Because of the importance of this issue, in this study, using regression models with wide intervals (ARDL) and considering a period of thirty years (1358-1387) as time series, the relationship between income inequality and productivity growth in the presence of structural factors such as R & D spending and human capital in rural areas has been investigated. According to the results, human capital and research expenditures, internal development, research capital accumulation and international development, each with coefficients of 11 / 0 08 / 0, has a significant impact on reducing income inequality in rural areas and Kuznets hypothesis which states that there is an Inverted U relationship between total productivity growth and income inequality in rural areas and agriculture in the period of study is not voidable.