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Measuring the effect of informal work and domestic activities on poverty and income inequality in Turkey

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Abstract

In this article, we propose to calculate the size of the population living in poverty, measured through uni- and multidimensional poverty indices, and the Gini coefficient using extended full (time plus money and informal earnings) incomes, from cross-sectional data covering 2003-2006 in Turkey. Thus monetary incomes are corrected by adding the earnings gathered from informal activities and the monetary values of time spent in domestic activities into declared incomes, producing an error-free estimate of the size of the population living in poverty and the Gini ratio overall. To show the effect informal activities with the domestic ones have on poverty, changes in the joint probability of being in informal activity while being considered poor is measured by means of a bivariate probit model using extended (money plus informal earnings) income and extended full incomes

Suggested Citation

  • Armagan Tuna Aktuna-Gunes, 2015. "Measuring the effect of informal work and domestic activities on poverty and income inequality in Turkey," Documents de travail du Centre d'Economie de la Sorbonne 15017, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:15017
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    1. Armagan Tuna Aktuna-Gunes & Carla Canelas, 2013. "A Multidimensional Perspective of Poverty, and its Relation with the Informal Labor Market: An Application to Ecuadorian and Turkish Data," Post-Print halshs-00820754, HAL.
    2. Smeeding, Timothy M, et al, 1993. "Poverty, Inequality, and Family Living Standards Impacts across Seven Nations: The Effect of Noncash Subsidies for Health, Education and Housing," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(3), pages 229-256, September.
    3. Friedrich Schneider & Dominik Enste, 1999. "Shadow Economies Around the World - Size, Causes, and Consequences," CESifo Working Paper Series 196, CESifo.
    4. Andreas Chai & Alessio Moneta, 2010. "Retrospectives: Engel Curves," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 225-240, Winter.
    5. Menno Pradhan & Martin Ravallion, 2000. "Measuring Poverty Using Qualitative Perceptions Of Consumption Adequacy," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 462-471, August.
    6. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
    7. Bibi, Sami, 2005. "Measuring Poverty in a Multidimensional Perspective: a Review of Literature," Working Papers PMMA 2005-07, PEP-PMMA.
    8. Delhausse, Bernard & Luttgens, Axel & Perelman, Sergio, 1993. "Comparing Measures of Poverty and Relative Deprivation: An Example for Belgium," Journal of Population Economics, Springer;European Society for Population Economics, vol. 6(1), pages 83-102.
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    More about this item

    Keywords

    Informal earnings; domestic activities; poverty; Gini coefficient;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • D1 - Microeconomics - - Household Behavior
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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