The Effect of Social Transfers on Income Inequality and Poverty in Türkiye

Abstract

This paper examines the effects of social transfers on inequality and poverty in Türkiye. We use Income and Living Conditions Survey that is conducted by TurkStat each year from 2006 to 2018. The social transfers include in cash and in-kind transfers from government to households. The standard budget incidence approach is used in the analysis. The redistribution impact of social transfers is measured using Gini coefficient and Suits coefficient and relative poverty rate. The equivalence scale adjustments are used for inequality and poverty estimations, and it is accepted as relative poverty approach. Pension income is the main factor that influences on reducing inequality and poverty. The inequality-reducing effect of pension income increased over time from 2005 to 2017. We also apply logistic regression analysis for 2018 SILC Survey. According to the logistic regression analysis, social transfers have the effect of reducing the probability of being poor in Türkiye.