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Globalization, wage shares and income distribution in Turkey

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  • Cem Oyvat

Abstract

Globalization is often observed to result in greater labour flexibility and decreased labour bargaining power; thus, imposing a downward pressure on wages, especially in the sectors producing tradable goods. This would result then in a deterioration of the wage share and rising inequality within developing countries. In 1980s, Turkey implemented liberalization policies to promote globalization of the Turkish economy by raising trade and capital flows. Using a sectoral panel data, this paper shows that low-wage competition followed by trade liberalization reduced the wage shares in the manufacturing industry. The analysis also exhibits that the financial liberalization and rising capital flows hurt workers by increasing macroeconomic volatility, leading to financial crises that affected the functional income inequality. Copyright 2010, Oxford University Press.

Suggested Citation

  • Cem Oyvat, 2010. "Globalization, wage shares and income distribution in Turkey," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 4(1), pages 123-138.
    • Handle: RePEc:oup:cjrecs:v:4:y:2010:i:1:p:123-138
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    File URL: http://hdl.handle.net/10.1093/cjres/rsq032
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    Cited by:

    1. Adem Y. Elveren & Gökçer Özgür, 2016. "The Effect of Informal Economy on Income Inequality: Evidence from Turkey," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 63(3), pages 293-312, June.
    2. Ozlem Albayrak, 2020. "Household Consumption, Household Indebtedness, and Inequality in Turkey: A Microeconometric Analysis," Economics Working Paper Archive wp_954, Levy Economics Institute.
    3. Cem Oyvat & Oğuz Öztunalı & Ceyhun Elgin, 2020. "Wage‐led versus profit‐led demand: A comprehensive empirical analysis," Metroeconomica, Wiley Blackwell, vol. 71(3), pages 458-486, July.
    4. Oyvat, Cem & Öztunalı, Oğuz & Elgin, Ceyhun, 2018. "Wage-led vs. profit-led growth: a comprehensive empirical analysis," Greenwich Papers in Political Economy 20951, University of Greenwich, Greenwich Political Economy Research Centre.
    5. Ozan Ekin Kurt, 2020. "Functional income distribution, capacity utilization, capital accumulation and productivity growth in Turkey: A post‐Kaleckian analysis," Metroeconomica, Wiley Blackwell, vol. 71(4), pages 734-766, November.

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