The dynamıcs of poverty ın Turkey

Demir Şeker, Sırma
Poverty analysis has been confined to incidence studies in Turkey. In the last decade research has focused on poverty persistence referred to as „new poverty‟, but it has not been quantified. In this thesis, we examine poverty dynamics in Turkey using the panel feature of the Survey of Income and Living Conditions for the years 2006 and 2007. Our aim is to contribute to the understanding of poverty persistence in Turkey and provide an input to the policy development to combat it. Firstly, we examine poverty transitions. Our results suggest that changes in earnings are important for transitions and individuals who experience poverty are more likely to experience it again. Heterogeneity among individuals and the causal link between past and current poverty (true state dependence) are processes that generate persistence. Secondly, we employ endogenous selection model to distinguish these processes. The results suggest that true state dependence is significant even after controlling for individual and household level characteristics. We search the source of state dependence in poverty in the labor market. Employing a similar model as in poverty persistence, a significant true state dependence in low-pay is found. When the poor are caught in low-pay trap, they are also caught in poverty trap. Lastly, we analyze whether social assistance is a remedy for state dependence in poverty. We find the effect of social assistance on poverty (direct effects) to be small. The analysis of potential work disincentive effects (indirect) of social assistance indicates that it leads to slower entry into employment.