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Turkish Middle Income Trap and Less Skilled Human Capital

Author

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  • Gokhan Yilmaz

Abstract

This paper reviews the literature on the Middle Income Trap and compares Turkey to the rest of the trapped and non-trapped (non-middle income trapped) countries. We analyze country experiences by focusing on the role of well-designed and high quality education system to avoid the trap. When we compare Turkey�s human capital to human capital in non-trapped countries, we observe that Turkish education system will be critical to break out the trap. An education system that is consistent with development path of the economy could yield both �skilled and high capability human capital� and �innovative and competitive productive capacity� to overcome the trap. Our qualitative analysis also demonstrates that Turkey has not been benefitting from de-agriculturalization sufficiently. Surplus labor coming from agriculture is not being employed in the knowledge intensive manufacturing activities. Moreover, the speed of de-agriculturalization is slow, hence Turkey can�t fully exploit unrepeatable gains of structural transformation. Transferring these agriculture workers into high productivity tradable activities can yield significant labor productivity and per capita income gains.

Suggested Citation

  • Gokhan Yilmaz, 2014. "Turkish Middle Income Trap and Less Skilled Human Capital," Working Papers 1430, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    • Handle: RePEc:tcb:wpaper:1430
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    File URL: https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Publications/Research/Working+Paperss/2014/14-30
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    Cited by:

    1. Glawe, Linda & Wagner, Helmut, 2020. "China in the middle-income trap?," China Economic Review, Elsevier, vol. 60(C).
    2. Umit BULUT & Ahsen Seda BULUT, 2015. "The Role of Schooling in Struggling with the Middle-Income Trap: Dynamic Panel Data Analysis," Journal of Social and Administrative Sciences, KSP Journals, vol. 2(4), pages 205-215, December.
    3. Mirjalili, Seyed Hossein & Mohseni Cheraghlou, Amin & Sa'adat, Hossein, 2018. "Avoiding Middle-income Trap in Muslim Majority Countries: The Effect of Total Factor Productivity, Human Capital, and Age Dependency Ratio," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 10(1), pages 5-21.
    4. Fang Chang & Wenbin Min & Yaojiang Shi & Kaleigh Kenny & Prashant Loyalka, 2016. "Educational Expectations and Dropout Behavior among Junior High Students in Rural China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(3), pages 67-85, May.
    5. Helmut Wagner, 2015. "Structural Change and Mid-Income Trap – Under which conditions can China succeed in moving towards higher income status?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 12(2), pages 165-188, December.
    6. Gill,Indermit S. & Kharas,Homi, 2015. "The middle-income trap turns ten," Policy Research Working Paper Series 7403, The World Bank.
    7. Murat A. Yülek, 2017. "On the Middle Income Trap, the Industrialization Process and Appropriate Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 17(3), pages 325-348, September.

    More about this item

    Keywords

    Economic Growth; Convergence; Middle Income Trap;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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