Poverty and Turkish labor markets

Abstract

This study aims to determine the relations between poverty and the dynamics of Turkish labor market. In this context, two secondary aims are also targeted. First is to demonstrate the situation of the poor in Turkey with international comparisons by employing various socio-economic measures. Second, is to clarify the poverty problem in Turkey in the framework of Turkish labor markets and to offer some policy recommendations directed towards Turkish labor markets. The study finds out endogenous relations between poverty and the dynamics of labor markets together with a couple of further endogenous and exogenous socio-economic impacts. Although the income measures place Turkey almost in the middle of 175 countries analyzed, the situation is traumatic for some measures of human development. Unfortunately, it is difficult to observe systematic poverty-reducing policies in Turkey. There seems to be bidirectional causality between poverty and underdevelopment where both simultaneously feed each other. In Turkish case, the starting assumption of the study is the differences in poverty in terms of rural-urban and regional dimensions. The results of the study confirm this assumption. Two important trends in Turkish labor markets, namely decreasing rate of labor force participation and increasing rate of unemployment, play significant roles for deepening the poverty problem. In this context, both poverty and unemployment present feedback on each other. Moreover, the unemployment of young and educated people accelerates this process. The regional unemployment figures also help to explain to regional poverty differences. Finally, the study offers direct, indirect and global policies for fighting against poverty. The indirect policies target economic growth and uneven distribution of income having impacts in the long-run. Direct policies, having relatively short-term impacts, include active labor market policies. The study offers a model of employing active labor market policies for combating poverty.