The Effects of Institutions Quality on the Intergenerational Welfare in Iran(An approach to the pattern of overlapping generations)

The purpose of this study is to analyze the impact of institutions' quality on intergenerational welfare in Iran during the period of 1996-2017. For this purpose, six institutional indicators of Political stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, Control of Corruption and Voice and Accountability, introduced by the World Bank were considered as institutional indicators. Due to the degree of freedom, all data were converted to seasonal data using Chow and Lin (1976) method. The effect of institutions on the intergenerational welfare of Iran, using the pattern of overlapping generations models (OLG), is estimated by seemingly unrelated equations (SURE) method. The results indicate that the institutional indicators of the Voice and Accountability and control of corruption have a positive and significant effect on the welfare of young and old generations and thus on ]ran's intergenerational welfare during the period of 1996-2017. Institutional Indicators such as the rule of law and the quality of regulatory have a negative and significant effect on Iran's intergenerational welfare. Institutional Indicators such as Government Effectiveness and Political Stability and Absence of Violence do not have a significant effect on the welfare of both generations and Iran's intergenerational welfare during this period.