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Evaluating the impacts of the COVID-19 pandemic on unemployment, income distribution and poverty in Turkey

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Listed:
  • Bayar, Ayşe Aylin
  • Günçavdı, Öner
  • Levent, Haluk

Abstract

In the recent World Economic Outlook, the IMF indicates that world output shrank by 3.5% in 2020. Despite all pessimistic expectations, the Turkish economy was one of the few countries to have a positive, albeit low, economic growth rate in 2020. This was, however, achieved at the expense of high social and economic costs. The present research examines the distributional costs of this economic growth during the pandemic and suggests economic measures required to control them. The empirical examination is based on generating unavailable income and living conditions for 2020 by using the results available in TurkStat’s 2017 Income and Living Conditions Survey. The actual changes in sectoral output and employment, which are available as of March 2021, are used to generate changes in the income levels of households in TurkStat’s 2017 survey. The research empirically shows that adequate fiscal support with a large scope for households and businesses is necessary to compensate for economic losses caused by the pandemic. The short-run working allowance policy appears to have been very important to improve income distribution, which might have deteriorated due to the pandemic. Direct cash support to households is considered another essential policy measure that is required to mitigate the severity of increased poverty.

Suggested Citation

  • Bayar, Ayşe Aylin & Günçavdı, Öner & Levent, Haluk, 2023. "Evaluating the impacts of the COVID-19 pandemic on unemployment, income distribution and poverty in Turkey," Economic Systems, Elsevier, vol. 47(1).
    • Handle: RePEc:eee:ecosys:v:47:y:2023:i:1:s093936252200108x
    DOI: 10.1016/j.ecosys.2022.101046
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    References listed on IDEAS

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    1. James Foster & Joel Greer & Erik Thorbecke, 2010. "The Foster–Greer–Thorbecke (FGT) poverty measures: 25 years later," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 491-524, December.
    2. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
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    More about this item

    Keywords

    COVID-19; Pandemic; Inequality; Poverty; Cash support; Fiscal aid; Turkey;
    All these keywords.

    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • P46 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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