Examining the Short-Term Dynamics of Income Mobility among Iranian Households under Stagflationary Conditions: Is Poverty a Trap?

Pishbahar, Esmaeil; Davoudnia, Zakieh; Ghahremanzadeh, Mohammad; Hosseinzad, Javad; Dourandish, Arash

doi:10.22059/ijaedr.2026.411188.669424

Examining the Short-Term Dynamics of Income Mobility among Iranian Households under Stagflationary Conditions: Is Poverty a Trap?

Document Type : Reserch Paper

Authors

Esmaeil Pishbahar ¹

Zakieh Davoudnia ²

Mohammad Ghahremanzadeh ²

Javad Hosseinzad ²

Arash Dourandish ³

¹ Department of Agricultural Economics, College of Agricultural Economics and Development, University of Tehran, Karaj, Iran.

² Department of Agricultural Economics, Faculty of Agriculture, University of Tabriz, Tabriz, Iran

³ Department of Agricultural Economics, Faculty of Agricultural Economics and Development,, University of Tehran, Karaj, Iran

10.22059/ijaedr.2026.411188.669424

Abstract

Income mobility is a key indicator of economic dynamism and plays an important role in assessing inequality and households’ opportunities for economic advancement. This study examines the patterns of intragenerational income mobility among urban and rural households in Iran during the period 2021–2023 using income decile transition matrices, the Shorrocks mobility index, and panel regression models. The results indicate that the highest degree of income movement occurs within the middle deciles, whereas the lowest and highest deciles exhibit relatively greater stability. In other words, low-income and high-income households are more likely to remain in their initial income positions than households in the middle of the income distribution. A comparison between urban and rural areas reveals a broadly similar mobility pattern, although differences exist in the magnitude of mobility and the factors determining it. Lower-income urban households experience less mobility than their rural counterparts, while rural households are more sensitive to demographic characteristics and economic conditions. The panel regression results confirm the significant roles of the household head’s age, household size, asset ownership, internet access, expenditure patterns, and macroeconomic variables in shaping income positions and decile mobility. Inflation, particularly in urban areas, emerges as one of the most important barriers to upward income mobility. These findings highlight the need for targeted regional policies aimed at controlling inflation, strengthening real household incomes, improving access to assets, and expanding information infrastructure to enhance opportunities for income mobility.

Keywords

Resilience

Climate variability

Mashhad

Uncertainty

Subjects

Agricultural Economics

REFERENCES

1. Aaberge, R., Bjorklund, A., Jantti, M., Palme, M., Pedersen, P. J., Smith, N., & Wennemo, T. (2002). Income inequality and income mobility in the Scandinavian countries compared to the United States. Review of Income and Wealth, 48(4), 443–469. https://doi.org/10.1111/1475-4991.00063

2. Amanzadeh, N., & Heydari, M. S. (2023). Absolute intragenerational income mobility in Iran. The Quarterly Review of Economics and Finance, 90(3), 38-50. https://www.sciencedirect.com/science/article/abs/pii/S1062976923000510

3. Aydemir, A., Chen, W. H., and Corak, M. (2009). Intergenerational earnings mobility among the children of Canadian immigrants. The Review of Economics and Statistics, 91(2), 377-397. https://doi.org/10.1162/rest.91.2.377

4. Becker, G. S., Kominers, S. D., Murphy, K. M., & Spenkuch, J. L. (2018). A theory of intergenerational mobility. Journal of Political Economy, 126(S1), S7-S25.‏ https://milescorak.com/wp-content/uploads/2018/12/becker-kominers-murphy-spenkuch-jpe-theory-intergenerational-mobility.pdf

5. Berger, T., & Engzell, P. (2022). Industrial automation and intergenerational income mobility in the United States. Social Science Research, 104, Article 102686. https://www.diva-portal.org/smash/record.jsf?pid=diva2%3A1661832&dswid=-6684 .

6. Berman, Y. (2022). Absolute intragenerational mobility in the United States, 1962–2014. The Journal of Economic Inequality, 20(3), 587–609. https://doi.org/10.1007/s10888-022-09529-7

7. Bibby, J. (1975). Methods of measuring mobility. Quality & Quantity, 9(2). http://hdl.handle.net/10.1007/BF00119980

8. Black, S. E., & Devereux, P. J. (2011). Recent developments in intergenerational mobility. In D. Card & O. Ashenfelter (Eds.), Handbook of labor economics (Vol. 4, pp. 1487–1541). Elsevier. https://doi.org/10.1016/S0169-7218(11)02414-2

9. Breen, R., Mood, C., & Jonsson, J. O. (2016). How much scope for a mobility paradox? The relationship between social and income mobility in Sweden. Sociological Science, 3, 39–60. https://sociologicalscience.com/articles-v3-3-39/

10. Cherubini, U., Luciano, E., & Vecchiato, W. (2004). Copula methods in finance. John Wiley & Sons. https://onlinelibrary.wiley.com/doi/book/10.1002/9781118673331

11. Chetty, R., Hendren, N., Kline, P., & Saez, E. (2014). Where is the land of opportunity? The geography of intergenerational mobility in the United States. The Quarterly Journal of Economics, 129(4), 1553–1623. https://doi.org/10.1093/qje/qju022

12. Doruk, O. T., Pastore, F., & Yavuz, H. B. (2022). Intergenerational mobility: An assessment for Latin American countries. Structural Change and Economic Dynamics, 60(1), 141–157. https://doi.org/10.1016/j.strueco.2021.11.008

13. Elouardighi 1, J. (2011). Pro-development economic growth and international income mobility: evidence worldwide. Économie internationale, 128(4), 77-96. https://shs.cairn.info/article/ECOI_128_0077

14. Fields, G. S., & Ok, E. A. (1999). The measurement of income mobility: an introduction to the literature. Handbook of income inequality measurement, 557-598.‏ https://link.springer.com/chapter/10.1007/978-94-011-4413-1_20

15. Formby, J. P., Smith, W. J., & Zheng, B. (2004). Mobility measurement, transition matrices and statistical inference. Journal of Econometrics, 120(1), 181-205.‏ https://doi.org/10.1016/S0304-4076(03)00211-2

16. Fotras, M., & Shahbazi, F. (2014). Investigating the impact of income mobility on poverty in Iran, 1984–2013. Journal of Economic Research, 112(50), 685-706. https://jte.ut.ac.ir/article_55808.html?lang=en

17. Fotras, M., & Shahbazi, F. (2015). Investigating income mobility in Iran during the years before and after the implementation of the Cash Subsidy Reform Law (1984–2013). Journal of Applied Economics of Iran, 12(3), 183-201.

18. Haggblade, S., Hazell, P., & Reardon, T. (2010). The rural non-farm economy: Prospects for growth and poverty reduction. World Development, 38(10), 1429–1441. https://ideas.repec.org/a/eee/wdevel/v38y2010i10p1429-1441.html

19. Isaacs, J. (2007). Economic mobility of families across generations. Economic Mobility Project. https://www.brookings.edu/articles/economic-mobility-of-families-across-generations/‏

20. Jani, S., & Khodaverdizadeh, S. (2019). Investigating the effect of rural income distribution on agricultural sector growth: A nonlinear panel autoregressive distributed lag approach. Iranian Journal of Agricultural Economics and Development Research, 51(2), 343–360. https://journals.ut.ac.ir/article_76615.html

21. Jantti, M., & Jenkins, S. P. (2015). Income mobility. In Handbook of income distribution Elsevier, 2(1), 807-935. https://www.iza.org/publications/dp/7730/income-mobility

22. Kano, S. (2009). Copula-based semiparametric modeling of intergenerational earnings mobility. https://www.econ.fukuoka-u.ac.jp/researchcenter/conference_09/Monday23/5-2_Kano.pdf

23. Lin, S. C., & Huang, Y. M. (2005). The role of social capital in the relationship between human capital and career mobility: moderator or mediator?. Journal of Intellectual capital, 6(2), 191-205.‏ https://doi.org/10.1108/14691930510592799

24. Mirfardi, A., Haidari, A., & Amini Khoo, M. (2021). The Measurement of Social Mobility of Rural-Urban Migrants and its Relationship to Social Capital in Yasouj and Madevan Cities. Academia Letters, 2.‏‏ https://www.sid.ir/paper/230651/en

25. Nelsen, R. B. (2006). An Introduction to Copulas (2nd ed.). Springer Series in Statistics. Springer-Verlag, New York. https://link.springer.com/content/pdf/10.1007/0-387-28678-0.pdf

26. Organization for Economic Co-operation and Development (OECD). (2018). Broken Social elevator? How to promote social mobility. Organization for Economic. https://www.oecd.org/en/publications/broken-elevator-how-to-promote-social-mobility_9789264301085-en.html

27. Organization for Economic Co-operation and Development (OECD). (2022). Social Mobility and Equal Opportunity. https://www.oecd.org/en/topics/social-mobility-and-equal-opportunity.html

28. Organization for Economic Co-operation and Development (OECD). (2017). Income Inequality and Social Mobility: New Evidence from https://www.oecd.org/en/publications/income-inequality-social-inclusion-and-mobility_g2g7ae77-en.html

29. Piketty, T., Saez, E., & Zucman, G. (2018). Distributional national accounts: methods and estimates for the United States. The Quarterly Journal of Economics, 133(2), 553-609. https://doi.org/10.1093/qje/qjx043‏

30. Piketty, T., Saez, E., & Zucman, G. (2023). A response to Auten and Splinter’s analysis of top incomes. Paris School of Economics & University of California, Berkeley. https://eml.berkeley.edu/~saez/PSZ2024.pdf

31. Raghfar, H., & Babapour, M. (2014). Income distribution dynamics in Iran using the introduction and measurement of various income mobility indices. Majles and Rahbord, 89(24), 55-79. https://nashr.majles.ir/article_191_en.html

32. Rohenkohl, B. (2019). Intergenerational income mobility in the UK: New evidence using the BHPS and Understanding Society. The Sheffield Economic Research Paper Series (SERPS), 2019017. https://eprints.whiterose.ac.uk/id/eprint/149252/

33. Sabaghi, M. A. (2020). Inequality of rural income distribution in Iran: An exploratory analysis of spatial data. Cuadernos de Desarrollo Rural, 17, 1-17.‏ https://www.redalyc.org/journal/117/11774644005/html/

34. Salehi-Isfahani, D., & Majbouri, M. (2013). Mobility and the dynamics of poverty in Iran: Evidence from the 1992–1995 panel survey. The Quarterly Review of Economics and Finance, 53(3), 257–267. https://doi.org/10.1016/j.qref.2013.04.005

35. Shahiki Tash, M. N., & Sheidaei, Z. (2022). Examining the Effects of Socio-Economic Variables on Rural Migration in Iran: A fuzzy Regression Approach. International Journal of Business and Development Studies, 14(2), 109-125.‏ 10.22111/ijbds.2022.7511

36. Shi, X., Nuetah, J. A., and Xin, X. (2010). Household income mobility in rural China: 1989–2006. Economic Modelling, 27(5), 1090-1096. https://ideas.repec.org/a/eee/ecmode/v27y2010i5p1090-1096.html

37. Shorrocks, A. F. (1978). The measurement of mobility. Econometrica: Journal of the Econometric Society, 1013-1024.‏ https://doi.org/10.2307/1911433

38. Solon, G. (2002). Cross-country differences in intergenerational earnings mobility.
Journal of Economic Perspectives, 16(3), 59-66. https://www.aeaweb.org/articles?id=10.1257/089533002760278712