Analyzing Income Distribution in Turkey

Abstract

This paper investigates the determinants of individual income distribution in Turkey. ARDL bound testing approach employed in this study. The econometric results suggest that economic growth and trade openness improve income distribution while inflation worsens it and budget deficit is statistically insignificant for 1963-1998 periods. The effect of economic growth in the short run is negative but the long run effect turns out to be positive. The impact of trade openness on income distribution is negligible. The limited impact of economic growth for these years implies that the other factors affecting income distribution negatively have been dominant.