Examination of the transition of Turkish households into and out of poverty between 2007-2010

Using a balanced panel data set drawn from TurkStat’s Income and Living Conditions Survey, we examine the transition of Turkish households into and out of poverty. During the four year period (2007-2010) under examination, the relative poverty rate had remained more or less the same in Turkey while the absolute poverty rate declined considerably, implying that households were more likely to exit than enter poverty. In addition to a descriptive analysis in which poor, non-poor, entrant, exitor, and switcher households are compared in terms of basic characteristics, the empirical work features the estimation of binary choice models that assess the relative importance of these factors in determining the poverty status of the households. Comparisons of non-poor vs. entrant and poor vs. exitor households - identified according to both relative and absolute poverty criteria - reveal that factors such as changes in labor income and household composition were mainly responsible for poverty status changes.