The effect of Islamic revolution and war on income inequality in Iran

Abstract Existing research has pointed to the decreasing effect of revolutions and wars on income inequality. It is unclear whether this reduction result ongoing changes before or if results are standalone effects. In study, we focus case Iranian Revolution 1978–1979 subsequent Iran–Iraq war from 1980 1988. We use synthetic control method study revolution in inequality levels. Had there been no Iran, how would have developed? Utilizing method, create a counterfactual Iran that reproduces socioeconomic characteristics Islamic revolution. Then, compare without factual under new political regime for period 1970–1988. Our results, based two different indicators Iran’s Gini index, show significant reducing Over entire 1979–1988 period, average per year, index was reduced by approximately three standard deviations index. The main findings robust series tests, including placebo tests.