1. Introduction
The process of economic development, along with the advances in the field of health, has led to an increase in life expectancy in different parts of the world. On the other hand, the fertility rate has decreased in different countries. These two issues have ultimately led to the aging of the population [1]. According to statistics published by international organizations and the censuses conducted by the Statistics Center of Iran, the Iranian population is aging. One of the sectors that is most affected by the demographic structure of communities is the economic sector. Population aging can reduce the active population and, consequently, reduce labor supply. Reduction in labor supply affects production costs, economic growth and income inequality [4]. This study aims to investigate the effect of population aging on income inequality in Iran from 1970 to 2018.
2. Methods
In this study, data were collected using the library method and those related to Iran’s economy. Based on the studies on modeling the effect of aging on income inequality, important demographic and economic variables affecting income inequality are: Aging, Literacy, Gross Domestic Product (GDP), Consumer Price Index (CPI), and trade openness [8, 9, 11, 33, 41]. Gini index was used as a variable indicating the status of income inequality in Iran. The income inequality Equation 1 is defined as follows:


Where, LGINI= logarithm of income inequality, LAgeing= Logarithm of aging index (population aged >65 / population aged <15); LLiteracy= Logarithm of literacy rate (enrollment rate in the second academic year), LCPI= Logarithm of CPI, LOpenness= Logarithm of trade openness index (sum of exports and imports / total GDP), LGDP= Logarithm of GDP, and=square of logarithm of GDP. The last two variables were used to test the Environmental Kuznets Curve (EKC) hypothesis. In the Equation 1, Du represents the years of Islamic Revolution and Iran-Iraq war. Data and information related to all variables were extracted from the websites of the Statistics Center of Iran and the World Development Indicators (WDI). All data were reported annually. After determining the income inequality pattern, its coefficients were estimated using AutoRegressive Distributed Lag (ARDL) model in Eviews 10 software. Moreover, in order to evaluate the speed of adjustment from the short-term equilibrium to the long-run equilibrium, the Error Correction Model (ECM) was estimated.
3. Results
First, in order to prevent false regression, the stationary of the data was tested. Augmented Dickey-Fuller (ADF) test was used for this purpose. The results showed that except for LLiteracy and LOpenness, which were stationary, all other variables became stationary by differencing once. Given that the variables had values as 0 or 1, the ARDL method can be used to estimate the model. The results of the showed that the increase in the aging population, both in short and long periods could significantly increase income inequality such that, in the long run, a 1% increase in the aging index led to a 0.14% increase in Gini coefficient (P<0.05). Other variables in the model also had significant changes. The increase in CPI also increases income inequality, while the increase in literacy improves income equality. GDP per capita in the long run had a negative impact on income distribution and exacerbated income inequality. The square of GDP per capita had also a negative value. Thus, in the long run, the EKC hypothesis is confirmed. This is acceptable given that Iran is a developing country; according to EKC hypothesis, the relationship between income inequality and income per capita is positive at the initial stages of economic development, and becomes negative at the final stages. The Du had a positive significant impact on income inequality. Coefficient of the ECM also had a significance value. The ECM coefficient indicated that 44.8% of the income disequilibrium was corrected from the short run to the long run; almost in two periods, a large part of the short-run error was compensated and the model moved towards a long-run equilibrium. Negative value of the ECM coefficient indicated that any long-run disequilibrium moves towards equilibrium. The values <1 indicated the convergence of the model in the short run.
4. Discussion and Conclusion
The increase in the aging population, which is the result of a decrease in the birth rate and an increase in survival probability, has intensified income inequality in Iran during 1970-2018. Other effective factors are literacy rate, GDP per capita, CPI, and trade openness. As the country’s aging population grows in the coming years, population aging is a potential factor for increased income inequality. Therefore, policymakers should plan to reduce the adverse effects of aging on income inequality, such as increased retirement age and increased participation rate of the elderly in the labor market, by investing in workers’ education (education based on current and future needs of the labor market), expansion of trading with other countries, stabilizing economic conditions, and controlling inflation.

Ethical Considerations
Compliance with ethical guidelines
This study was approved by the Ethics Committee of Tarbiat Modares University (Code: IR.MODARES.REC.1399.127).

Funding
This study was extracted from the PhD. dissertation of first author at the Department of Economics, Faculty of Management and Economics, Tarbiat Modares University.

Authors' contributions
All authors equally contributed to preparing this article. 

Conflicts of interest
The authors declared no conflict of interest.


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