Fair distribution of income is one of the major issues in economic policy. Therefore, the study of factors affecting are very important and in this regard financial development is an important factor affecting the distribution of income. This research intends to study the effect of financial development on income distribution in developing countries by income separation over the period (1990-2014), using panel data method.
The results suggest that the relationship between financial development and Gini coefficient among upper middle income countries is positive and significant and among down middle income countries is negative and significant.The impact of GDP growth and quasi money on the Gini coefficient on both income groups of developing countries is positive and significant and Inflation is negative, but not significant. In addition, the effect trade on income distribution is positive and significant.