REGIONAL INEQUALITIES IN TURKEY: POST 2001 ERA

Abstract

This paper examines the path of the regional inequalities in Turkey for the post 2001 period. After the financial turmoil and the sharp downturn in the economy in 2001, Turkey managed to sustain 3.6 % real per capita GDP growth between 2002 and 2014. Even the increase in the GDP is remarkable the way that the growth is distrib- uted at the regional scale is questionable. Originating from the concern on the ability of Turkish regions to equally benefit from the economic growth, regional inequalities are evaluated via regional wage income differences at NUTS II disaggregation for the 2003-2008 period. Even initial set of analysis point out a fall in the regional wage income gaps, a careful interpretation indicate the persistence of the heterogeneous pattern coming from the pre-2001 period. Analysis covering all industries indicates that, out of the 26 sub-regions, 5 of the NUTS II regions in the eastern Turkey move to a group of regions with lower wage income during the 2003-2008 period. Meanwhile neither the high wage region clusters nor the outlier regions acting as geographic transitions do realize a significant movement within the distribution. Results are much or less consistent for manufacturing production as well. In general findings underline a period of ongoing polarization in the wage income at NUTS II level during the post 2001 period in Turkey. Additionally results also highlight the non-randomness of this polarization even at NUTS II disaggregation which once more points out that spatial dependence and spatial heterogeneity works together in Turkey.