This analysis requires a data set that covers the longest available period. The data for the empirical analysis is based on the Household Budget Survey for 2002-2017. As the Household Expenditure Survey covers only 2002, the Survey of Living Conditions has also been used. However, this survey covers a relatively shorter period starting from 2006. All data are available from TurkStat.[4]
Household income data are decomposed into sources such as non-tradable economic activity, tradable economic activity, and agricultural income, and their summary statistics are given in Table 2. The sample size for any income group represents the number of total income entities establishing total household income, which may consist of one or a combination of these three different income entities. However, in this study, every household income entity is considered as a separate unit. Table 2also shows that among others, the standard deviation of non-tradable activity income entities is the highest, implying that the variation in this income is due to the heterogeneous structure of its source.
Table 2
|
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
2008
|
2009
|
TRADABLE
|
Max.
|
160341
|
370151
|
69130
|
79891
|
102480
|
73825
|
72973
|
101021
|
Mean
|
3150
|
3301
|
3547
|
3522
|
4268
|
3570
|
3417
|
3499
|
Min.
|
2.1
|
6.7
|
4.4
|
4.0
|
6.1
|
1.8
|
4.1
|
3.5
|
Median
|
1856
|
2254
|
2590
|
2657
|
3273
|
2894
|
2686
|
2856
|
St. Dev.
|
5829
|
5500
|
4413
|
3522
|
4527
|
3516
|
4041
|
3761
|
Skew
|
16.0
|
16.2
|
7.7
|
7.7
|
6.0
|
6.1
|
6.7
|
8.8
|
n
|
14876642
|
22048711
|
16031101
|
17478602
|
17116564
|
18444104
|
18630737
|
17036137
|
NONTRADABLE
|
Max.
|
336560
|
177659
|
120765
|
179893
|
154955
|
102918
|
110014
|
217699
|
Mean
|
3346
|
3426
|
3608
|
3780
|
4838
|
4447
|
4857
|
4970
|
Min.
|
336560
|
0.7
|
5.6
|
2.6
|
4.9
|
0.7
|
0.8
|
0.2
|
Median
|
4136
|
2231
|
2396
|
2622
|
3618
|
3240
|
3618
|
3443
|
St. Dev.
|
6736
|
5278
|
5266
|
4792
|
5789
|
5002
|
5436
|
6687
|
Skew
|
21.2
|
8.7
|
7.8
|
6.3
|
6.4
|
4.3
|
4.4
|
8.3
|
n
|
66287298
|
66460029
|
67507321
|
68669945
|
70357142
|
66312417
|
67326517
|
68226184
|
AGRICULTURE
|
Max.
|
28597
|
46196
|
94136
|
30509
|
29865
|
33655
|
57857
|
51458
|
Mean
|
2294
|
2134
|
2124
|
2302
|
2794
|
2260
|
2152
|
3224
|
Min.
|
0
|
0
|
0
|
3.4
|
8.0
|
7.3
|
4.2
|
5.2
|
Median
|
1473
|
1475
|
1419
|
1692
|
2060
|
1642
|
1454
|
1758
|
St. Dev.
|
2857
|
2452
|
3630
|
2576
|
2794
|
2489
|
2652
|
2626
|
Skew
|
4.0
|
6.0
|
16.4
|
3.8
|
2.9
|
4.3
|
6.2
|
5.6
|
n
|
22048711
|
16789151
|
17594220
|
18676646
|
15333020
|
13896658
|
13797746
|
16807558
|
|
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
TRADABLE
|
Max.
|
76208
|
171973
|
185815
|
154121
|
98238
|
182743
|
92946
|
80232
|
Mean
|
3692
|
3720
|
4187
|
4349
|
4240
|
4667
|
4853
|
5074
|
Min.
|
8.5
|
0.5
|
4.1
|
4.7
|
4.8
|
24
|
11
|
20
|
Median
|
1584
|
2933
|
3176
|
3281
|
3336
|
3462
|
3841
|
4087
|
St. Dev.
|
4264
|
4901
|
6050
|
5944
|
4770
|
7728
|
4846
|
4632
|
Skew
|
6.2
|
10.6
|
15.0
|
12.0
|
8.2
|
13.1
|
5.8
|
4.7
|
n
|
17867430
|
17598157
|
16940213
|
16825394
|
17029073
|
17622065
|
16207227
|
17517293
|
NONTRADABLE
|
Max.
|
395198
|
182378
|
276920
|
245155
|
258152
|
245624
|
173078
|
35503
|
Mean
|
4985
|
5134
|
5630
|
5928.
|
6200
|
6330
|
6906
|
6965
|
Min.
|
4.2
|
18.2
|
4.7
|
3.8
|
1.2
|
14
|
9.2
|
9.1
|
Median
|
3569
|
3652
|
3993
|
4285
|
4521
|
4533
|
5108
|
5202
|
St. Dev.
|
6454
|
62088
|
7351
|
7327
|
7767
|
8251
|
7546
|
8653
|
Skew
|
8.8
|
5.1
|
9.0
|
7.8
|
9.0
|
8.9
|
5.5
|
11.2
|
n
|
68753815
|
70255447
|
71457497
|
72583775
|
73801900
|
73833434
|
75349688
|
76502540
|
AGRICULTURE
|
Max.
|
47845
|
49463
|
58592
|
91236
|
59683
|
65273
|
61259
|
66203
|
Mean
|
2651
|
2914
|
3105
|
3345
|
3739
|
3667
|
3763
|
4407
|
Min.
|
5.9
|
2.1
|
5.3
|
9.1
|
6.9
|
1.7
|
0.9
|
1.3
|
Median
|
1810
|
1972
|
2116
|
2515
|
2605
|
2553
|
2554
|
2858
|
St. Dev.
|
3045
|
3439
|
4102
|
3524
|
4249
|
4184
|
4292
|
5366
|
Skew
|
4.6
|
3.9
|
6.5
|
5.3
|
5.0
|
4.8
|
4.3
|
4.0
|
n
|
14728957
|
16120797
|
14601895
|
14250679
|
12017294
|
11641515
|
11973974
|
12331914
|
*values represented at the table are deflated with consumer price index (2003 = 100) and weighted for the population. |
(Table 2 about here)
Three important issues must be addressed on the data we use. The first is to establish a unit of analysis. There are two options in this regard, namely households, and individuals. As this study is intended to measure the welfare of all individuals in a household irrespective of whether they have any income, the household is considered as the most suitable unit. However, households are not homogeneous by size, and the household income level must be adjusted according to the number of individuals present in each household. Therefore instead of using total household annual income, equivalent annual individual disposable income is used as the unit of analysis by taking into account household size.[5] Despite the different approaches to this adjustment available in the literature, the OECD scale is used in this study. This scale assigns different weights to adults and children in households, and is calculated as follows:
$$N=1+\alpha \left({s}_{A}-1\right)+\beta {s}_{K}$$
3
where sA and sk represent the number of adults and children in the household, respectively. The coefficients of α and β are fixed parameters. In this equivalent scale, these parameters show different weights, which are assumed to be 1, 0.5, and 0.3 for the household head, the household wife and any children (under the age of 15), respectively. The equivalent annual individual disposable income can then be calculated as follows:[6]
where Ri and Yij is the household total disposable income and the equivalent annual individual disposable income (where i refers to households and j refers to individuals).
The second issue that we must deal with is to determine a proper poverty line. 50% of the median income of all households’ nominal income in each sample is taken as a reference to calculate a relative poverty line covering the 2002–2017 period. To examine changes in the levels of different income entities in different years, this relative poverty line is used as a constant reference and is deflated according to the relevant consumer price index (2003 = 100). Accordingly, the nominal income for a particular year is deflated by the corresponding price index value of that year. Therefore, the empirical analysis in what follows is based upon the use of real values, rather than nominal ones.
This empirical study aims to examine the impacts of different income entities on changes in overall poverty in the Turkish economy. Measuring poverty then becomes the third issue to be considered for this purpose.[7] Following the conventional approach in the literature, the poverty rate is chosen as the measure of poverty in this study. It is calculated in conventional studies as the proportion of households remaining below a pre-determined relative poverty line. In the present study, two different calculation approaches are pursued to meet its empirical requirements. The first is similar to the conventional approach to measuring the overall poverty rate as the proportion of households having the equivalent annual individual disposable income for each year below a constant relative poverty line. This poverty rate is calculated in empirical studies as follows:
where N is the size of the sample and q is the number of households or income entities below the relative poverty line. P0 in conventional poverty studies is known as the head-count ratio.
To measure the relative contributions of each income entity, such as non-tradable activity, tradable activity, and agricultural income, on changes in overall poverty, we introduce an unconventional measure of poverty as the proportion of different income entities (instead of household equivalent annual individual income) which have levels lower than the constant real relative poverty line. Although this measure is unconventional, it is useful when attempting to understand the importance of each income entity in the determination of changes in poverty. Since de-industrialization is defined as an increase in the number of non-tradable income entities and rapid growth in non-tradable activity income levels, it is to be expected that these will have a significant positive impact on poverty rates and encourage further non-tradable activity and de-industrialization.
It must be noted that the calculated poverty rates in this study differ significantly from those announced by TurkStat due to the calculation methodology used. The most distinctive difference is that the relative poverty line is taken as a constant to calculate the poverty rate for each year. In TurkStat announcements, the poverty rate is calculated for each year by estimating different poverty lines that correspond to different surveys. Another difference between this study and TurkStat is that actual (not nominal) values for household income are used in our calculations. The final difference is that TurkStat reports the poverty rate only for the overall economy, and does not provide any information on the poverty-rate-alike measure for any income entity. At this stage, it should be noted that the poverty-rate-alike measure, for example, of non-tradable activity income entities, is the proportion of those which have levels lower than the level of the actual relative poverty line. It is to be expected that as de-industrialization intensifies along with an increase in non-tradable income by both level and number, it is more likely that there will be fewer non-tradable activity income entities which have levels lower than the pre-determined poverty line. Therefore, a fall in the poverty-rate-alike measure of non-tradable activity income entities can result from de-industrialization.
(Fig. 5 about here)
The differences in two different calculated poverty rates can easily be seen in Fig. 4 and Fig. 5. The poverty rates in Fig. 4 are from TurkStat, and vary between 0.19% and 0.14%. Our calculated poverty rates for the overall economy are given in Fig. 5, and vary between 35% and 7%. In Fig. 5, poverty-rate-alike measures for all the income entities available in our study, namely non-tradable activity, tradable activity and agricultural, are also depicted. In 2002, 56.4% non-tradable activity income entities remained below the real value of the calculated relative poverty line. However, only 24.6% of all non-tradable activity income entities had values lower than their corresponding relative poverty line. This implies that economic development over the last 15 years has increased non-tradable activity income and allowed increasing numbers of non-tradable activity income entities to pass the level of a given relative poverty line.
Another interesting observation from Fig. 4 and Fig. 5 is that they both show improvements in poverty rates. However, unlike Fig. 4, a slight slowdown appears after 2012 in Fig. 5. When examining the compositional pattern of the poverty-rate-alike measure, similar improvements can be seen across all income entities. Finally, the calculated poverty-rate-alike measures for non-tradable activity income entities seem to be the lowest. This is indeed not a surprising result as increases in non-tradable economic activities over the last 15 years have lowered the percentage of those below a given relative poverty line.
Additionally, agriculture sector income entities have the lowest values and the highest proportion which falls below the common relative poverty line. This also means that any household that relies on agricultural income has the highest probability of remaining in poverty. The poverty-rate-alike measure is not the only indicator to show differences between different income groups. To elaborate on the general features of the data, the means, population shares, and within-group inequality levels of all income groups can also be examined.
Differences in sectoral mean income
In this study, the total income of households is decomposed into three components according to the sectors through which income is generated: non-tradable activity, tradable activity and agricultural. The mean income level of each income group can be determined by the volume of economic activities as directed by economic policies. An increase in non-tradable economic activities is assumed to be a consequence of the de-industrialisation process as they generate a higher mean income than other economic activities. To illustrate this, the mean income of each income group is calculated and the results are given in Fig. 6. As previously noted, since these figures are obtained from the Households Budget Surveys, they are not available for the period before 2002. Figure 6 indicates that mean non-tradable activity income is higher than the mean income of other income sources. This is an expected result of a rise in the non-tradable economic activities driving de-industrialisation. It is also clear from Fig. 6 that the mean non-tradable activity income steadily increased after 2002, but this increase becomes much more marked after 2008.
(Fig. 6, Fig. 7 and Fig. 8 about here)
Change in population shares
“Population” in this study refers to the number of income entities available for households. Household income is decomposed by income type, and each income group consists of similar income entities. Any “change” in the number of any income entity is referred to as a change in the population share of the relevant income entity group. For example, an increase (or decrease) in the population share of non-tradable activity income must be considered to be a rise (or fall) in the number of its associated income entities. Figure 7 shows this change in each income component. Three distinctive results can be taken from the data given in Fig. 7. First, the population share of agricultural income shows a decline after 2009. Second, tradable activity income items cluster around zero, indicating no major change in their population share. Third, non-tradable activity income entities and their population share increase after 2009. These results offer a clear indication of a population shift towards non-tradable economic activities.
Within-group income distribution
Figure 8 gives the inequality levels (as measured by Gini coefficients) of the three income groups and shows that tradable activities have the lowest within-group inequality. Non-tradable activities have the highest within-group inequality due to the greater variability in size and nature among income items. To a lesser degree, the same is true for agricultural income, which is earned according to the size of the land owned and worked by given households. These inequalities show that any measures intended to improve overall income distribution must then target these two income groups, particularly with regard to within-group inequality. This becomes even more important as continued de-industrialization means that the non-tradable activity income group has an ever-increasing potential to generate improvement in the distribution of income throughout the economy.
These initial indicators show that sectoral transformation, particularly after 2009, generated results in favour of non-tradable activity income earners, and households whose income, either partially or whole, comes from non-tradable activities are the most likely to benefit from this transformation.
Decomposing changes in poverty by (2) reveals further information about the general character of the structural transformation in the Turkish economy. The decomposition method in (2) produces four distinctive sources of poverty, some of which can be linked to de-industrialisation. They are:
- Overall economic growth;
- Sectoral growth rate;
- Within-group inequality;
- Population shift.
The first (i) indicates the general economic growth effect, which is derived by assuming that all income groups grow at the same rate. The second (ii) is particularly important when examining an empirical link between de-industrialisation and poverty as it shows the importance of the growth rate of a particular income group when examining changes in poverty. The third (iii) is the effect of within-group inequality, which shows the homogeneities of income entities by level within groups. Finally, the fourth (iv) helps to produce an estimate of the impacts on the poverty of a disproportionate shift towards a particular income group. In particular, an increase in the number of non-tradable activity income entities is taken as a sign of a population shift. This effect can also be considered as an indicator of the relationship between de-industrialisation (meaning a rise in non-tradable economic activities) and poverty.
(Table 3 about here)
Table 3
– The decomposition of changes in poverty based on different income entities
|
Within Group Growth Effect
|
<th align="left" colspan="4" style="width: 13.3436%;">
<p>Within Group Inequality Effect</p>
</th>
<th align="left" colspan="3" style="width: 14.8629%;">
<p>Population Shift</p>
</th>
<th align="left" colspan="2" style="width: 3.9634%;">
<p>Total Change (%)</p>
</th>
</tr>
</thead>
<tbody>
<tr>
<td align="left" style="width: 3.1047%;"> </td>
<td align="left" colspan="3" style="width: 14.8629%;">
<p><strong>Overall Growth Effects</strong></p>
</td>
<td align="left" colspan="4" style="width: 14.8629%;">
<p><strong>Growth Rate Varying From One Group to Other</strong></p>
</td>
<td align="left" colspan="4" style="width: 14.8629%;"> </td>
<td align="left" colspan="3" style="width: 15.5235%;"> </td>
<td align="left" colspan="2" style="width: 1.9502%;"> </td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;"> </td>
<td align="left" style="width: 4.624%;">
<p><strong>Tradable</strong></p>
</td>
<td align="left" style="width: 4.3598%;">
<p><strong>Non-tradable</strong></p>
</td>
<td align="left" style="width: 5.8791%;">
<p><strong>Agriculture</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p><strong>Tradable</strong></p>
</td>
<td align="left" style="width: 4.3598%;">
<p><strong>Non-tradable</strong></p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p><strong>Agriculture</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p><strong>Tradable</strong></p>
</td>
<td align="left" style="width: 4.3598%;">
<p><strong>Non-tradable</strong></p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p><strong>Agriculture</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p><strong>Tradable</strong></p>
</td>
<td align="left" style="width: 4.3598%;">
<p><strong>Non-tradable</strong></p>
</td>
<td align="left" style="width: 5.8791%;">
<p><strong>Agriculture</strong></p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;"> </td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2002–2003</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,60</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>2,36</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>0,75</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-1,11</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-3,30</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,21</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-1,09</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-2,46</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,12</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,16</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>3,65</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-4,89</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-5,01</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2003–2004</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,58</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-1,50</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,52</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,51</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,53</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,58</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-1,10</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-1,12</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,32</p>
</td>
<td align="left" style="width: 4.624%;">
<p>1,13</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-1,33</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>0,22</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-4,93</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2004–2005</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,49</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-1,21</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,64</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,62</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,41</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-0,70</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,26</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-1,70</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-0,59</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,70</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-1,14</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>0,55</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-5,26</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2005–2006</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>-3,12</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>0,92</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>1,68</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,30</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-9,67</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-3,17</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,14</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-4,32</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-1,38</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,02</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>2,46</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-3,59</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-20,08</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2006–2007</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>3,76</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>1,97</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>0,44</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,73</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>6,12</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>2,83</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-1,22</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-3,65</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-0,27</p>
</td>
<td align="left" style="width: 4.624%;">
<p>1,98</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-1,17</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-1,28</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>9,51</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2007–2008</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,25</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,46</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,19</p>
</td>
<td align="left" style="width: 4.624%;">
<p>1,08</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-3,29</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,88</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,62</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-1,67</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,65</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,02</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>0,24</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,39</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-2,81</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2008–2009</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,34</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-4,21</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,36</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,01</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,01</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-2,55</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,70</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>7,97</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-0,50</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-2,04</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,57</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>4,04</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>0,71</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2009–2010</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,11</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,38</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,08</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,82</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>0,21</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-0,05</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,10</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-2,90</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-0,19</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,90</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>0,87</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-2,70</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-5,36</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2010–2011</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,13</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,28</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,10</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,02</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,95</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-1,33</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,34</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>1,08</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,66</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,70</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,24</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>1,40</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-0,27</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2011–2012</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,11</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>0,64</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>0,13</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-2,39</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-4,74</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-1,13</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,56</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-2,16</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,55</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,44</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>1,55</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-1,86</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-10,29</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2012–2013</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,17</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,24</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,10</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,62</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-2,23</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-1,21</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,11</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-2,13</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-1,84</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,19</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>0,56</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,62</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-8,88</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2013–2014</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,17</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>0,45</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>0,07</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,42</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-2,93</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-2,07</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,48</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-1,62</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,98</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,32</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>1,55</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-2,91</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-5,08</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2014–2015</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,09</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,15</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,07</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-2,21</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-1,54</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,62</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,98</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>0,77</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,00</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,55</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,13</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,58</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-1,85</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2015–2016</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,12</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,12</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,10</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,66</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-4,88</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-0,36</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-2,69</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-3,66</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,75</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-1,30</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>1,00</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>0,42</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-11,74</p>
</td>
</tr>
<tr>
<td align="left" style="width: 3.1047%;">
<p><strong>2016–2017</strong></p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,49</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-1,76</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>-0,70</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,54</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>1,17</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>-2,04</p>
</td>
<td align="left" style="width: 4.624%;">
<p>-0,60</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,66</p>
</td>
<td align="left" colspan="2" style="width: 5.8791%;">
<p>0,61</p>
</td>
<td align="left" style="width: 4.624%;">
<p>0,70</p>
</td>
<td align="left" style="width: 4.3598%;">
<p>-0,76</p>
</td>
<td align="left" style="width: 5.8791%;">
<p>0,05</p>
</td>
<td align="left" colspan="2" style="width: 3.9634%;">
<p>-5,02</p>
</td>
</tr>
</tbody>
</table>
<p>Decomposing the changes in poverty levels can also reveal the sources of poverty itself. Each component in (2) corresponds to one distinctive source of these changes. Upon applying the decomposition method, given in (2), the results reported in Table <span class="InternalRef">3</span> yield information regarding the sources of poverty in Turkey over the 2002–2017 period. Based on Son (<span class="CitationRef">2003</span>) in Eq. (<span class="InternalRef">2</span>), four sources for changes in poverty levels are revealed, and the calculated sizes of each source are reported in Table <span class="InternalRef">3</span>. The relative importance of each component is distinguished by these calculated sizes. For tractability and ease of interpretation, the reported results are depicted in Figs. <span class="InternalRef">9</span> and <span class="InternalRef">10</span>. Figure <span class="InternalRef">10</span> shows the <em>cumulative</em> contribution of each component to changes in overall poverty, whereas the results from Table <span class="InternalRef">3</span> are directly presented in Fig. <span class="InternalRef">9</span>. Most of our inferences are based on the data given in Fig. <span class="InternalRef">10</span>, but the same intuitive results can also be obtained from that given in Fig. <span class="InternalRef">9</span>.</p>
<p>(Figs. <span class="InternalRef">9</span> and <span class="InternalRef">10</span> <em>about here</em>)</p>
<p>Panel (a) in Figs. <span class="InternalRef">9</span> and <span class="InternalRef">10</span> show that there were significant changes in poverty levels over the entire period, and that the great extent of these changes was positive. However, between 2007 and 2011, the pace of reductions slowed before improvements in the poverty rate once again gained speed (see Fig. <span class="InternalRef">9</span>). In Fig. <span class="InternalRef">10</span>, it can be seen that the size of the cumulative reduction exceeded 15% over the entire 2002–2017 period.</p>
<p>Having decomposed these changes in poverty into their components, two questions can be answered. The first is the question regarding which income group accounted for most for these reductions. The second one is through which channel the contribution of different income groups is the most effective.</p>
<p>Panel (b) in Figs. <span class="InternalRef">9</span> and <span class="InternalRef">10</span> shows the contributions of overall economic growth into changes in poverty under the assumption that all income groups grow at the same pace. The data show that <strong>as long as all income groups grow at the same rate, none of the income entities in each group have any distinctive contribution to changes in poverty</strong>.</p>
<p>According to the results in Panel (c) of Fig. <span class="InternalRef">10</span> (and Fig. <span class="InternalRef">9</span>), differing growth rates between income groups generate different contributions to poverty. The markedly higher growth rates of non-tradable activity income groups are therefore the most likely to contribute to positive changes in poverty. In other words, <strong>economic growth led largely by non-tradable economic activities is most likely to become pro-poor economic growth</strong>.</p>
<p>Another important component with the potential to cause changes in poverty is within-group inequality. From the data given in Panel (d) of Fig. <span class="InternalRef">10</span>, alleviating income distribution among non-tradable activity income entities reduces poverty. Therefore, any improvement in income inequality accounts for greater reductions in overall poverty than other factors. It is important for Turkish policymakers to allow not only for a rise in non-tradable activity income entities but also to <strong>achieve a relatively fair distribution of non-tradable activity income</strong>.</p>
<p>An interesting result for non-tradable income entities appears in Panel (e) of Fig. <span class="InternalRef">10</span>. The effects on changes in poverty of population shifts within different income groups are measured in this panel. A population shift in this respect means an increase in the share of particular income entities in total. In particular, the number of non-tradable activity income entities increases during de-industrialisation, and there is a corresponding population shift towards this income group, thereby increasing its proportion. A striking result from Fig. 7 is that cumulative changes in population share steadily increased for non-tradable activity income entities, remained largely consistent for tradable income entities, and declined for agricultural income entities. This result can be interpreted as an indication of intensified de-industrialisation, particularly after 2009. However, <strong>this steady increase in the share of non-tradable income entities also accounts for a deterioration in poverty levels</strong>. This result may be obtained only in the case where there is an increase in the number of these entities below the poverty line. It also means that during de-industrialisation, the expansion of non-tradable economic activities encourages the creation of income below the poverty level. This can also be considered as evidence for the hypothesis that these activities create low wage jobs, reduce productivity, and generate poor quality economic growth (see Acemoğlu ve Uçer, 2020).</p>
<p><br></p>
<p>[4] In 2002, TurkStat<u> initiated annual</u> “<em>Household Income and Consumption Expenditure Surveys</em>” <u>conducted</u> on 800 sample households per month. <u>These</u> <u>included</u> approximately 650 different households from urban areas and 150 from rural areas, <u>totaling</u> 9600 sample <u>households</u> per <u>annum</u>. <u>In</u> <u>2003</u>, the title of the survey was changed <u>to the</u> “<em>Household Budget Survey</em>”. The sample size <u>increased</u> to 25,920 households. The design of the survey <u>was</u> revised to form a basis for EU harmonization studies and NUTS regions <u>were</u> obtained. <u>The</u>se surveys cover <u>a reduced</u> sample size for 2003; however, <u>the</u> sample size drastically increased <u>to</u> 720 households per month and 8640 households per <u>annum</u> for the <u>2004-2008</u> period. After 2009, the sample size increased to 1050 households per month and 12,600 per <u>annum</u>. Finally, between 2010 and 2017 the same surveys were conducted for 1104 households per month and 13,428 households per <u>annum</u>.</p>
<p style='margin-bottom: 10px !important; color: rgb(0, 0, 0); font-family: "Times New Roman"; font-size: medium; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;'>[5] Household disposable income is defined as the total income plus transfer income from the government or other institutions plus interest income minus income taxes (TurkStat, 2011).</p>
<p style='margin-bottom: 10px !important; color: rgb(0, 0, 0); font-family: "Times New Roman"; font-size: medium; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;'>[6] Household expenditures can be <u>both</u> individual and <u>collective</u>. Examples of individual expenditures are clothing, education costs, personal <u>consumption</u>, <u>and examples of shared</u> expenditures are heating and accommodation. Therefore, in the case of a comparison between the welfare levels of individuals in two different households, the expenditures made for individual and common u<u>se, a</u>s well as the composition of these two househol<u>ds, a</u>re important. While the common goods and services bring the advantage of economies of scale, the number of children in the household compositi<u>on will</u> affect the welfare level of the individuals in the household. This is because, in the surveys, a ranking is made <u>according</u> <u>to</u> the usable incomes of households.</p>
<p style='margin-bottom: 10px !important; color: rgb(0, 0, 0); font-family: "Times New Roman"; font-size: medium; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;'>[7] See Kakwani, 1980; Foster et al, 1984; Atkinson 1987, Ravallion, 1994.</p>