IDEAS home Printed from https://ideas.repec.org/p/koc/wpaper/1711.html
   My bibliography  Save this paper

Is There an Income Convergence across Provinces of Turkey?

Author

Listed:
  • Sumru Oz

    () (Koc University-TUSIAD Economic Research Forum)

Abstract

In this paper, whether there is a convergence of per capita incomes across Turkish provinces during 2004-2014 period is examined following the availability of per capita incomes of Turkish provinces for this period as of December 2016. Considering that firms and households of different regions within a country tend to have access to similar technologies, share a common central government, therefore have similar institutional setups and legal systems, and they can be assumed to have roughly similar tastes and cultures, absolute income convergence is expected to hold across regions of a country. The results of the nonlinear least squares regression show that the absolute convergence across 81 Turkish provinces, which is estimated as 1.2 per cent per year, is lower that than those estimated for the US states, Japan prefectures, and the members of the EU. However, once a proxy for human capital is included besides the initial level of per capita income as a second explanatory variable in the regression equation, the speed of convergence increases to 2.2 per cent per year. This implies that once the differences in educational attainment across Turkish provinces are held constant, there exists conditional income convergence of similar magnitude found in studies on convergence across regions of other economies. Taking into consideration the evidence that the attitude towards, especially girls' education differs to a large extent between eastern and western regions of Turkey, the same regressions are repeated for 41 western and 40 eastern provinces, separately. The results show that the estimated conditional convergence reaches as high as 4 per cent across eastern provinces, while it is around 2 per cent across western provinces once the human capital is controlled for. This result implies that an effort to change attitude towards education in eastern Turkey is critical in increasing the speed of convergence, thus reducing income inequality across Turkish provinces.

Suggested Citation

  • Sumru Oz, 2017. "Is There an Income Convergence across Provinces of Turkey?," Koç University-TUSIAD Economic Research Forum Working Papers 1711, Koc University-TUSIAD Economic Research Forum.
  • Handle: RePEc:koc:wpaper:1711
    as

    Download full text from publisher

    File URL: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/erf_wp_1711.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    3. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, October.
    4. Aysit Tansel & Nil Demet Güngör, 2016. "Gender Effects of Education on Economic Development in Turkey," World Scientific Book Chapters,in: Women, Work and Welfare in the Middle East and North Africa The Role of Socio-demographics, Entrepreneurship and Public Policies, chapter 3, pages 57-86 World Scientific Publishing Co. Pte. Ltd..
    5. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    6. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    7. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    8. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    9. Keller, Wolfgang, 1996. "Absorptive capacity: On the creation and acquisition of technology in development," Journal of Development Economics, Elsevier, vol. 49(1), pages 199-227, April.
    10. Jerik Hanushek & Dennis Kimko, 2006. "Schooling, Labor-force Quality, and the Growth of Nations," Educational Studies, Higher School of Economics, issue 1, pages 154-193.
    11. Xavier Sala-I-Martin, 1997. "Transfers, Social Safety Nets, and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 81-102, March.
    12. Edward Nissan & Farhang Niroomand, 2015. "Gender and Spatial Educational Attainment Gaps in Turkey," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(1), pages 102-109, January.
    13. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Growth; Output Convergence; Human Capital; Turkey.;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:koc:wpaper:1711. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sumru Oz). General contact details of provider: http://edirc.repec.org/data/dekoctr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.