INCOME DISTRIBUTION
IN TURKEY
WHO GETS WHAT?
Zehra Kasnakoglu
The unequal distribution of income and wealth is one of the most prominent features of our
society and one which has a profound effect on economic and social relationships. Yet, there is
no other problem with such great human interest as this, which has received such little scientific
attention. During the early post-Second World War era, loss of interest in distributional questions
can be attributed in part to the concentration on full employment and growth and a belief that
these would provide benefits for everyone. It was argued by economists, that over a period of
years, even those who find themselves at the short end of inequality have more to gain from
faster growth than from any conceivable income redistribution. In the past two decades however,
interest in questions of income distribution has begun to revive. The renewed concern reflects the
growing realization that full employment and growing per capita incomes do not, by themselves,
lead to the steady reduction of inequality and the discovery of the persistence of poverty in
advanced countries.
For the present, however, distributional issues affect policy decisions mainly indirectly, rather
than via direct and explicit distributive policies. Their indirect influence typically takes the form
of a policy paralysis. Thus, for example, when a war on inflation is called for, action is delayed
because of disagreement over distributional issues. Views differ concerning the resulting size and
speed of price, wage, and profit changes, or about the timing of any direct wage or price controls.
If a war on poverty is to be waged, how costs are to be distributed between classes whose income
place them above the poverty line becomes the basis for distributional disagreement and
paralyzes the policy implementation.
There is a wide variety of distribution problems in economics, each corresponding to a different
division of society into social groups, classes, or regions. Economists have traditionally
concentrated their attention on two of the bases for such division. The first is the functional
distribution concerned with the division of income between income from labor (wages, salaries,
managerial) and income from property (rents, interest, dividends). The second is the personal
distribution concerned with the division of income or wealth by size among the members of
society (individuals or households).
The studies employing one of these two primary divisions, namely functional and personal,
would often employ some of the remaining divisions as their secondary divisions. The purpose of
this article is to present an overview of the income distribution in Turkey, both currently and over
time, from the personal or size distribution perspective, but also to introduce other dimensions
such as sectoral, regional and gender within this division. The study will mainly be based on the
recently completed Income Distribution Survey conducted by the State Institute of Statistics(SIS)
in 1994. The survey covered a sample of 18,264 households in urban and 7,992 households in
rural areas of Turkey. The income concept employed in the survey and in this article is the
average annual household disposable income.
Table 1 presents the most recent available data on income distribution by five income quintiles in
Turkey during the past 30 years.
Current income distribution
The income share of the households in the lowest income quintile is 5%, while the share of the
households in the highest income quintile is 55%. Since the number of households in each
income quintile is equal, this distribution gives an idea about average household incomes. The
average household income in the highest quintile income group is 11 times more than that of the
lowest income quintile (Table 2). The share of the fourth income quintile is 19%, indicating that
the families in this group are receiving only 35% of the income received by the highest income
group. These figures indicate the existence of a relatively high unequal distribution of income in
Turkey. While, 20% of the households receive 55% of the income pie, the remaining 80% of the
households receive only 45%. Although international comparisons are quite risky, we can point
out that shares of the highest income quintile in most of the developed countries are 40% or less.
Income distribution over time
Six different income distribution studies have been conducted in Turkey since 1963. The
methodologies, sampling sizes and sampling methods of these surveys show significantly large
diversities. One should therefore be very careful in drawing conclusions from their comparisons.
Nevertheless these are the only statistics available on the topic and are not inferior to similar
studies conducted in other countries. From the examination of different surveys, we conclude that
the share of the lowest household quintiles ranged between 3-5%, and the share of the middle
quintile varied between 10-14%, while the share of the highest income quintile remained at over
50% for a period of 31 years. With the above-mentioned reservations in mind, regarding the
comparisons of different surveys and allowing for a 5% level of statistical significance, we can
conclude that an undesirable but consistent trend is observed in the distribution of income in
Turkey. Over the past three decades, 20% of the households with the highest income have
managed to receive 50% and more of the total disposable income, while the remaining 80% of
households have had to be satisfied with 50% or less.
This conclusion is an indication of the lack and/or failure of income distribution policies of
Turkey. One of the principal policies to improve income distribution is accelerating investment in
human capital. Investment in human capital means investment in education and health, and this
has been deteriorating in real terms over the past decades. The returns on human capital
investment are only realized in the long run. Therefore such investments are less favored by
governments than short run high return investments, especially in periods of high political
instability.
Urban and rural income distribution
When we study the distribution of disposable income of five income groups in urban areas of
Turkey, we observe greater inequality of income distribution than overall averages. The relative
shares in income of the lowest and the highest urban income groups are 5% and 57%. The same
percentages for the rural areas are 6% and 48% respectively. One should note that these results
are not an indication of higher rural incomes, but they simply mean that lower rural incomes are
distributed more equally than the higher urban incomes.
Regional income distribution
When we look at the distribution of income between regions in Turkey, we observe that the
Marmara region is the only region with a higher income share than its household share. Almost
27% of the households live in the Marmara Region, while 38.6% of the total disposable income is
controlled by the households of that region. Income shares of the other regions are less than their
households' share. Eastern and Southeastern Anatolian regions have almost equal shares of
households, 7% each, but they receive 6% and 5% of the total disposable income respectively.
The existence of large- sized households in the region is an indicator of an even more severe
imbalance in the distribution of per capita incomes.
Table 3 presents income distribution within regions in Turkey, using Gini Coefficients, which
take values between 0 and 1, higher values representing higher inequality. While, the Marmara
region appears to be in an advantageous position with respect to income share, the Gini
Coefficient of the region, 0.56, is the highest among the regions, an indicator of high inequality
of income distribution among the households within the region. The lowest Gini Coefficients are
registered in the Eastern and Southeastern Anatolia. Incomes in these regions, even though lower
than the incomes in other regions, are relatively equally distributed. Once again, we should
remember that the Gini Coefficient is a summary measure for the distribution of incomes within
the regions, it does not indicate anything with respect to the relative levels of average incomes of
the different regions.
There are also wide variations in the distribution of incomes within provinces as illustrated by the
Gini Coefficients for selected provinces in Table 4. ‹stanbul, has the most unequal distribution of
income within the provinces with a Gini Coefficient of 0.59. The share of the highest income
quintile is 64% and the lowest is 4.2%. Therefore, the average per capita income of the highest
income quintile is 15 times that of the lowest income quintile, and 6.5 times that of the midincome quintile respectively. Zonguldak is registered as the province with the most equal
distribution of income with a Gini Coefficient of 0.33. The per capita income of the highest
income group is less than 6 times that of the lowest income group.
Income distribution by gender
The households headed by women constitute 8% of the households in Turkey. More than half of
these households are found in the lowest two income groups, and one third in the lowest income
group. 13% of the households headed by men are in the lowest income group. Their respective
shares of the income of the lowest income group are 15% and 85% . If we consider the income
distribution by gender, we clearly observe a large difference in the average incomes of the maleheaded and female-headed households in Turkey. The average annual incomes of female-headed
households in Turkey in urban areas are 67% of the male-headed households. The mean income
in rural areas for female-headed households is 61% of the mean income for male-headed
households.
Furthermore, income receiving women in Turkey constitute 35% of the total income receiving
population, but their share of income earned is less than 10%. The average income per income
receiving man is five times that of women's income. The income and earnings gap by gender
remains tight for all educational, occupational and social status groups. We also observe great
variations within gender average incomes for different income groups.
Income distribution and poverty
According to a recent study by G. Erdo¤an of SIS, the poverty line for households in Turkey is
estimated to vary between an annual income of $1500-$3200. Therefore, households with an
income of $1750 or less might be considered as the poverty income group. With this assumption,
14% of the households fall into the poverty income class and receive only 2% of the total
household income.
In Turkey a very large proportion of working men and women are not covered by social security.
58% of the income receiving persons, 79% of income receiving women and 48% of income
receiving men do not benefit from social security. The percentage of the uninsured people in rural
areas is even higher. Nearly 95% of women and 65% of men in rural areas have no social
security. In urban areas the same percentages are approximately 55% for women and 35% for
men. Over 90% of the uninsured women and 50% of the uninsured men are in the poverty
income group.
Income distribution and consumption patterns
The implication of the unequal distribution of income on consumption patterns of the households
is quite important. In 1994, households in the lowest income quintile spent 48% of their income
on food ( excluding alcoholic beverages, cigarettes and tobacco), while the highest income group
allocated only 23% of their income to food expenditure. (Table 5). Housing rent takes 25 % of
the total incomes of the lowest income quintile households. Expenditures on basic necessities
(food, clothing, rent), for the lowest income groups, adds up to 79% of the total household
expenditures. Including household furnishings and transportation this adds up to 88%, leaving a
very small share for the education of the children, health and cultural spending on the family
(6%). For the mid-income quintile, the sum of the three basic expenditure groups are 71%, while
for the highest income group the total share of these basic necessities is only 55%.
The share of bread and cereals in total food (excluding alcoholic beverages, cigarettes and
tobacco) expenditure for Turkey as a whole is 22%. The shares for the lowest and highest income
groups are 25% and 18% respectively. The highest income group devotes equal shares to bread
and cereals and meat subgroups, while the lowest income group spends more than twice as much
on bread and cereals than meat. Expenditures on meat and milk products are 25% and 34% for
the lowest and highest income quintiles. Therefore, income distribution has implications for
nutrition, as well as the education and health of the household members.
Conclusions
Income is distributed unequally in Turkey. There has not been a significant improvement in
income distribution over the last three decades. The richest 20% of the families remain as the
receivers of over 50% of the income generated in Turkey. Income distribution is also unequal
between and within the regions. Urban households constitute only about half of the population
but receive nearly 75% of the income, while the half in rural areas receive the remaining 25%.
Income on the other hand is distributed more equally in rural areas than in urban areas. The
Marmara region's share of income is greater than its household share in population. Eastern and
Southeastern Anatolia are the regions with the lowest income shares. ‹stanbul is the province with
the highest, and Zonguldak, the lowest degree of inequality in income distribution.
The evidence of the last three decades clearly shows that the governments in Turkey have not
followed active direct and indirect policies to moderate income inequality. It appears that shortterm near-sighted policies in this regard have been dominant and income distribution policies
have either been paralyzed and/or delayed in an environment of political and economic
instability.
Table I
Income Distribution by Household
Quintiles in Selected Studies
Percentage of Households
SPO
AUFPS SPO
TIBA
1968
1973
1986
1987
1994
Lowest %20
4.50
3.00
3.50
3.90
5.24
4.86
Next
%20
8.50
7.00
8.00
8.40
9.61
8.63
Next
%20
11.50
10.00
12.50
12.60
14.08
12.61
Next
%20
18.50
20.00
19.50
19.20
21.15
19.03
Highest %20
57.00
60.00
56.50
55.90
49.94
54.88
1963
SIS
SIS
Source: SIS (1990) and SIS (1996)
Notes: SPO: State Planning Organization; AUFPS: Ankara University, Faculty of Political
Sciences
TIBA: Turkish Industrialists' and Businessmen's Association; SIS: State Institute of Statistics
Table II
Relative Average Household Incomes by
Household Quintiles, 1994
Percentage of Households
SPO
AUFPS SPO
TIBA
1968
1973
1986
1987
1994
Lowest %20
1
1
1
1
1
1
Next
%20
1.9
2.3
2.3
2.2
1.8
1.8
Next
%20
2.6
2.9
3.6
3.2
2.7
2.6
Next
%20
4.1
6.7
5.6
6.0
4.0
3.9
12.7
20
16.1
14.3
9.5
11.3
1963
Highest %20
SIS
SIS
Source: Own calculations based on SIS (1990) and SIS (1996)
Note: Income levels are given relative to the incomes of the lowest income group
------------------
Table III
Gini Coefficients by Region
Source
Year
Turkey Aegean/ Mediterranean
Marmara Anatolia Sea
Central Black
Anatolia
AUFPS 1968
0.56
0.45
0.53
0.55
0.55
0.62
SPO
1973
0.51
0.46
0.56
0.49
0.53
0.50
SIS
1987
0.44
0.43
0.43
0.43
0.37
0.46
SIS
1994
0.49
0.44/0.56 0.47
0.44
0.46
0.37/0.38
Source: SIS (1990) and SIS (1997a)
Notes: See Table I
Table IV
Income Distribution by
Household Quintiles in Selected Provinces
Province First
Second Third
Fourth
Fifth
Gini
%20
%20
%20
%20
Coefficient
Zonguldak
7.2
12.0
17.5
23.6
39.7
0.33
Gaziantep
8.0
11.6
15.8
22.6
42.0
0.34
Malatya 7.2
11.5
16.0
22.7
42.6
0.35
Ankara 6.3
10.6
15.3
21.8
46.0
0.39
%20
East/Southeast
Eski_ehir
6.3
10.5
15.2
23.1
44.9
Kocaeli 5.7
10.2
15.0
21.5
47.6
0.41
‹zmir
6.5
10.3
14.6
21.0
47.6
0.41
‹çel
6.3
10.4
14.9
20.8
47.6
0.41
Samsun 6.2
9.7
14.1
21.1
48.9
0.42
Diyarbak›r
6.9
10.1
13.2
19.2
50.6
Denizli 6.1
10.0
14.3
20.4
49.2
0.42
Bursa
6.5
10.5
14.0
19.6
49.4
0.42
Konya
5.8
9.5
13.8
21.2
49.7
0.43
Erzurum 5.6
9.3
14.4
19.9
50.8
0.45
Trabzon 5.7
9.7
13.7
19.7
51.2
0.45
Antalya 5.8
9.1
12.5
18.2
54.4
0.48
Kayseri 5.0
7.9
11.2
18.0
57.9
0.51
Adana
4.1
6.5
9.6
15.3
64.5
0.59
‹stanbul 4.2
6.7
9.9
15.1
64.1
0.59
Source: SIS (1997a)
----------------------
Table V
Consumption Patterns by
Income Quintiles in Turkey (1994)
0.39
0.42
Categories
Turkey First
Second Third
Fourth
%20
%20
%20
%20
%20
32.83
47.67
44.09
39.39
33.86
22.98
Food+Clothing
41.79
54.42
51.89
48.35
43.39
32.44
64.62
78.87
75.39
71.40
66.16
54.69
F+C+R+House Furnishings 73.64
84.14
83.00
79.47
74.71
65.57
F+C+R+HF+Transportation 82.43
87.59
86.74
84.61
83.78
78.37
Education+Health+Culture 6.33
4.04
4.47
5.49
5.65
8.11
Food
Food+Clothing+Rent
Fifth
Source: Own calculations based on SIS (1997b)
--------------
Assoc. Prof. Zehra Kasnakoglu
Middle East Technical University
Department of Economics & Gender and Women's Studies
Bibliography
A. B. Atkinson, Wealth, Income and Inequality, Penguin, Harmonsworth, 1973.
M. Bronfenbrenner, Income Distribution Theory, Aldine. Atherton, Chicago, 1971.
Z. Kasnakoglu, and S. Uygur. Women in Labor Force and Poverty: Turkey 1994, Paper presented
at the 6th International Interdisciplinary Congress on Women, Adelaide, Australia, April 21-26,
1996.
SIS, 1987 Income Distribution: Household Income and Consumption Survey Results, Ankara,
1990.
SIS, 1994 Income Distribution Preliminary Results, SIS News Bulletin, October 18, Ankara,
1996.
SIS, 1994 Income Distribution Preliminary Results at the Regional and Provincial Levels, SIS
News Bulletin, January 27, 1997 Ankara, 1997a.
SIS, Household Consumption . Expenditures Survey Results 1994, Ankara, 1997b.
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PRIVATEVIEW : AUTUMN 1997