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Intertemporal CGE Analysis of Income Distribution in Turkey

Author

Listed:
  • Aykut Mert Yakut

    (Postdoctoral Research Fellow, Department of Economics, Middle East Technical University, Ankara, Turkey)

  • Ebru Voyvoda

    (Department of Economics, Middle East Technical University, Ankara, Turkey)

Abstract

This study focuses on the effects of public policies on the size distribution of income in Turkey. To this end, an intertemporal dynamic equilibrium model with heterogeneous agents in a small open economy framework is constructed. This study serves several extensions to the literature via its algebraic structure and the calibration process in which various micro-level data sets are utilized. The results reveal that, in line with the previous findings of the literature, increasing budget allocations to unilateral social transfer programs has no significant effect on the size distribution of income and has adverse effects on the labor market decisions of relatively poor laborers. On the contrary, subsidizing the cost of labor has positive impacts on labor supplies and the size distribution of income improves in favor of relatively poor households.

Suggested Citation

  • Aykut Mert Yakut & Ebru Voyvoda, 2017. "Intertemporal CGE Analysis of Income Distribution in Turkey," ERC Working Papers 1703, ERC - Economic Research Center, Middle East Technical University, revised Feb 2017.
    • Handle: RePEc:met:wpaper:1703
    as

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    File URL: https://erc.metu.edu.tr/sites/erc.metu.edu.tr/files/menu/series17/1703.pdf
    File Function: First version, 2017
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Intertemporal CGE Analysis of Income Distribution in Turkey
      by pmakdissi in NEP-ARA blog on 2017-03-15 20:04:39

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    2. Attar, M. Aykut, 2021. "Growth, distribution and dynamic inefficiency in Turkey: An analysis of the naïve neoclassical theory of capital," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 20-30.

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    Keywords

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    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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