The effect of the global financial crisis on household income, inequality and poverty in Turkey

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2016-4

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Şeker, Sırma Demir
Dayıoğlu Tayfur, Meltem

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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Using a nationally representative large scale micro data, we investigate the effect of the Global Financial Crisis (GFC) on household income, inequality and poverty in Turkey. In assessing the impact of the GFC, we take 2007 (pre-crisis year) as the benchmark and compare 2009 to 2007 and to 2011 (post-crisis period). We find that (real) household disposable income drops by 3.6 percent from 2007 to 2009, but that the decline in equivalized income is lower at 1.2 percent. Income inequality decreases over the crisis period, so does the absolute poverty rate, though quite marginally. Changes in household size and composition, household labor supply and non-contributory transfers help mitigate the negative effects of the GFC. The period following the crisis is marked by increases in both disposable income and equivalized income, and a sizeable drop in the poverty rate though we also observe an increase in income inequality.

Subject Keywords

Global financial crisis, Household income, Income inequality, Poverty, Turkey

URI

http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/854
https://hdl.handle.net/11511/58215

Journal

ODTÜ Gelişme Dergisi

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Department of Economics, Article

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Citation Formats

S. D. Şeker and M. Dayıoğlu Tayfur, “The effect of the global financial crisis on household income, inequality and poverty in Turkey,” ODTÜ Gelişme Dergisi, vol. 43, no. 1, pp. 361–390, 2016, Accessed: 00, 2020. [Online]. Available: http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/854.