Structural Determinants of Household Savings in Turkey: 2003-2008

Arda Aktas, Duygu Guner, Seyfettin Gursel and Gokce Uysal

Abstract

Widening current account deficits coupled with low private saving rates in Turkey have started a recent policy debate on how household savings can be increased. Using Household Budget Surveys from 2003 to 2008, we study the structural determinants of household savings in Turkey. We consider various different definitions for savings, including durable consumption goods, education and health. Our findings are robust across different definitions. The results indicate that dependency ratios of households are important determinants of savings. Lower shares of dependent children or dependent elderly in the household imply higher saving rates. Moreover, female labor force participation has significant effects, i.e. households with higher shares of working females, have higher saving rates as well. We also find that households in which the head is self-employed or an employer have higher saving rates. Moreover, households with where pension payments constitute a larger share of income save less. Note that pension payments are always coupled with free health benefits. These findings point to strong evidence of precautionary savings.

pdf.WorkingPaper#007

Credit Crunch or not? Case of Turkey during the Global Economic Crisis

Betam Working Paper Series #006

Credit Crunch or not? Case of Turkey during the Global Economic Crisis

Kerim Gökay,  Zümrüt İmamoğlu ve Barış Soybilgen

Abstract

This paper analyzes whether Turkish firms experienced a credit crunch at the outset of the global crisis. Our hypothesis is that if a credit crunch was experienced in Turkey, firms that are more dependent on external finance for investment and working capital must have been affected more severely. Hence, we should observe a higher drop in their stock returns during the crisis. Using firm-level data, we find that returns of firms with high dependence on external finance for working capital and balance sheet problems before the crisis decline more during the crisis. We also run the same regressions for pre-crisis drops in the stock market as a placebo test. We find that stock returns were not affected by dependence on external finance for investment and working capital in the non-crisis period. Our results suggest that Turkish firms might have experienced a credit crunch at the outset of the crisis even though Turkish banking sector was intact. On the other hand, we find no evidence for a demand effect: Being an exporter does not matter for the decrease in stock returns.

pdf. WorkingPaper006

Explaining the Gender Wage Gap in Turkey Using the Wage Structure Survey

Arda Aktaş ve Gökçe Uysal

Gender discrimination in the labor market can take on many forms, the most prominent one being the gender gap in wages. The labor market in Turkey is not an exception. Even though the gender wage gap is 3 percent on average, a closer look reveals important differences along the wage distribution. There is virtually no gender gap at the lower end and men earn 6.47 percent more than women at the median. Surprisingly, women seem to earn 4.99 percent higher wages than men at the top of the wage distribution. Using the quantile regression method, we discuss how the labor market returns differ along the wage distribution. Secondly, we use the Machado-Mata decomposition method to reveal how much of the gender gap at each quantile can be explained by gender differences in characteristics versus gender differences in returns. We find that the gender gap actually widens when we control for basic characteristics such as age, education and tenure. In other words, controlling for gender differences in labor market characteristics reveals that there is gender discrimination in Turkey, as measured by the differences in returns.

pdf.  WorkingPaper#005

Why is Agricultural Employment Increasing in Turkey?

Türkiye’de tarım istihdamı neden artıyor?

Seyfettin Gürsel ve Zümrüt İmamoğlu

Özet

Türkiye’de uzun süredir düşmekte olan tarım istihdamı, özellikle küresel ekonomik kriz döneminde artmaya başlamıştır. 2007 ile 2010 yılları arasında tarım istihdamı yüzde 17 artmış ve toplam istihdamdaki payı 2007 seviyesinin 1.7 yüzde puan üzerine çıkmıştır. Bu makalede tarım istihdamındaki artışın nedenleri araştırılmaktadır. Tarım istihdamındaki artış tarım dışı istihdam olanaklarının ve tarım dışı ücretlerin kriz döneminde azalmasından mı kaynaklanmaktadır? Yoksa dünya çapında artan gıda fiyatları tarım gelirlerini artırarak tarımı istihdamını çalışanlar açısından daha cazip hale mi getirmiştir? Bu makalede, iki sektörlü küçük açık ekonomi modeliyle dünya gıda fiyatlarındaki değişimlerin sektörel istihdam üzerindeki etkileri incelenemektedir. Modelin önermelerini sınamak için 26 bölge bazında oluşturulmuş panel veri seti kullanılmaktadır. Bu veri seti 2004 – 2010 yılları arasında tarım fiyatları ve üretimi, tarım dışı ücretler ve istihdam ile bölgesel enflasyonu içermektedir. Bulgular Türkiye’de tarım istihdamında gözlemlenen değişimlerin hem tarım fiyatlarındaki artıştan hem de tarım dışı istihdam olanaklarının azalmasından kaynaklandığına işaret etmektedir.

 

Abstract

The decrease in the share of agricultural employment in Turkey has been reversed lately especially during the global crisis. Agricultural employment increased by 17.0 percent between 2007 and 2010 and its share in total employment increased by 1.7 percentage points above its 2007 level. This paper studies the causes of the increase in agricultural employment. Is the surge in agricultural employment stemming from a decrease in the non-agricultural employment opportunities and the decrease in non-agricultural wages during the crisis? Or, have increasing food prices around the world caused an increase in agricultural income, making the agricultural sector more attractive for employment? We use a two-sector small open economy model to analyze the eff ect of changes inworld agricultural prices on sectoral employment. In order to quantify the implications of our model we exploit the regional variation in agricultural employment across 26 regions in Turkey. We use panel data covering agricultural prices and production, non-agricultural wages, employment and regional inflation between 2004 and 2010. We nd that both increases in agricultural prices and decreases in non-agricultural job opportunities are important in explaining the variation observed in agricultural employment in Turkey.

pdf. WorkingPaper#004

Efficiency of public expenditures in Turkey: when direct transfers really contribute to citizens’ welfare?

Seyfettin Gursel, Renginar Dayangac ve Bilge Ozturk Goktuna

Abstract

This paper uses a general equilibrium model of a small open economy to explore the implications of different public expenditure policies. We allow for three types of public expenditures, government can invest in public capital stock thereby making production enhancing public expenditures, make utility or welfare enhancing public expenditures through supply of public services and direct transfers to consumers. In this context, our main concern will be to analyse the optimality of government’s choice among these alternatives regarding the trade-off between growth and welfare, for a given level of fiscal burden as well as the trade-off between tax weight and growth in one hand and welfare on the other hand.

DETERMINANTS OF STUDENT ACHIEVEMENT IN TURKEY

Mehmet Alper Dinçer ve Gökçe Uysal

Abstract

Recent achievement test results show that Turkish students have been performing poorly compared to students from other countries. Using data from the PISA 2006 survey, we aim to measure the determinants of student achievement in Turkey. We find that the program type the student is enrolled in affects student achievement significantly. However, this effect may partially be biased by past academic achievement. In line with the previous literature, our results also indicate that school resources have limited, if any, effect on student achievement. On the other hand, we find that socioeconomic background variables such as parental edu- cation, parental employment, household items, etc. of the student are major determinants of student achievement. Students coming from similar socioeconomic backgrounds enroll in similar schools. To measure possible effects, we use an index of socioeconomic background to calculate an average socioeconomic status within a given school. We find that this has an effect over and above the e®ects of the individual socioeconomic background factors and program types. Therefore, we conclude that any policy design has to take into account the large role of socioeconomic background in determining student outcomes.

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