GINI DECOMPOSITION BY GENDER: TURKISH CASE

Transcription

1 BRUSSELS ECONOMIC REVIEW - CAHIERS ECONOMIQUES DE BRUXELLES VOL N 1 - SPRIN 2010 EZI KAYA (UNIVERSITAT AUTÒNOMA DE BARCELONA INTERNATIONAL DOCTORATE IN ECONOMIC ANALYSIS) AND UMIT SENESEN (ISTANBUL TECHNICAL UNIVERSITY FACULTY OF MANAEMENT) ABSTRACT: The aim of this paper is to reveal the geder iequalities i icome distributio for Turkey by usig decompositio of ii coefficiet, a commo icome iequality measure. A ew decompositio method, Dagum s approach for decompositio of the ii coefficiet is used i the study. I the aalysis, the decompositio of the ii coefficiet by geder is applied to Turkish idividuals twice. First ii coefficiet for total disposable icome is decomposed to examie the geder disparities i idividual icome distributio. Here disposable icome iequality is examied o the basis of female male, illiterate primary secodary tertiary educatio levels, urba rural areas, agricultural o-agricultural sectors. Secod, ii coefficiet for wage-icome is partitioed to its compoets to defie wage gap betwee males ad females. The wage-icome iequality is also examied o the basis of geder, educatio levels, urba rural areas, as well as public, private ad state ecoomic eterprises (SEE). The data used here are the icomes of Turkish idividuals ad come from 2005 Household Budget Survey coducted by Turkish Statistical Istitute (TURKSTAT). The decompositio of ii coefficiet preseted that the cotributio of iequalities betwee geders is more ifluetial i icome distributio tha i wage-icome distributio ad the portio of iequality betwee geders i other icome factors to the total icome iequality is more tha it is i wage-icome. Lastly, aother class of decomposable icome iequality measures, geeralized etropy idexes are decomposed by geder ad the differeces betwee ii decompositio ad geeralized etropy idexes are examied. JEL CLASSIFICATION: D63, D31, J16, J71. KEYWORDS: ii coefficiet, decompositio, icome distributio, geder. Correspodig author: kayaez@uab.cat 59

2 INTRODUCTION The aim of this paper is to reveal the geder iequalities i icome distributio for Turkey. There is limited umber of empirical studies o the topic ad most of them ivestigate the geder based wage iequalities i the labour market (Ilkkaraca ad Selim, 2007; Kara, 2006; Tasel, 2005; Dayioglu ad Tuali, 2004; Dayioglu ad Kasakoglu, 1997). I this study the two methods, amely etropy idexes ad Dagum s decompositio of ii coefficiet, are compared ad it is show that the latter is preferable. The applyig the decompositio method o the Turkish data, several types of icome iequalities are compared with the geder iequality. Afterwards, geder iequalities i each of the icome categories are aalyzed. This approach is cosistet with the traditioal scietific research method used i social scieces which rely o comprehesive databases ad quatitative methods. Certai geder studies express that, these methods are mostly developed by males ad the quatitative data they use are criticized for ot reflectig exactly or ot takig ito cosideratio the issues of cocer to wome (uluk-seese, 1998, p.26). Femiist researchers, propose that the mai databases, atioal household surveys, especially i developig coutries, take households as uits which geerate male-biased aalysis ad policies ad do ot allow cosiderig geder disparities ad mostly igore wome (Berik, 1997, p.122). For this reaso some femiist researchers prefer to use qualitative, rather tha quatitative methods i geder studies ad believe that qualitative methods reflect huma experieces better (Jayarate, 1983, p.109). However this approach limits the studies o wome s social status ad it is difficult to compare the results because of a little use of quatitative methods. Sice social ad ecoomic policies are closely liked with data ad systematic methods, these limitatios cause the outcomes of these valuable works to be igored (uluk-seese, 1998, p.26). As Berik idicated that there is o distictive femiist method, but rather there are femiist applicatios of methods ad that the research questio rather tha the method should drive the research (1997, p.122). Whe the use of quatitative method is cosidered as a importat ad effective tool for policy makers, the qualitative methods used i geder studies should be supported by the obective ad statistical methods i order to be take serious i social ad ecoomic policy recommedatios (Jayarate, 1983, p.112). I this paper with the use of quatitative data ad traditioal method, it is expected to make a cotributio to studies o wome s social status. For this purpose, Sectio II gives a brief history o etropy idexes ad decompositio of most widely used icome iequality measure i ecoomics, ii coefficiet. Sectio III aalyses a ew decompositio method developed by Dagum ad ca be cosidered a methodology sectio. Sectio IV compares the fidigs of ii decompositio ad etropy idexes. Sectio V examies the role of geder played i icome ad wage iequalities i Turkey by decomposig ii coefficiet. Fially Sectio VI summarizes the results. 1. A BRIEF HISTORY For ay iequality measure, decomposability of a whole to costituet parts is a essetial property to brig out the sources of iequality. For a log time, a widely used icome iequality measure, ii coefficiet, is thought to be o-decomposable ad discussios 60

3 EZİ KAYA AND UMİT SENESEN carried o the class of decomposable icome iequality measures. However the close lik betwee ii coefficiet ad Lorez curve made ii coefficiet popular amog may researchers ad led them to work o ii decompositio. The iitial research o icome iequality decompositio is Soltow s 1960 work, i that he aalyzed the effects of chages i educatio, age ad occupatio o icome distributio (Mussard et al., 2005, p.2). The importat step i decompositio literature is a ew icome iequality measure developed by Theil i 1967 ad derived from the Secod Law of Thermodyamics (Dagum, 1997, p.515). Etropy Law measures the shares of betwee ad withi-groups iequalities i total iequality (Theil, 1967, p.19). Theil allocated fourth chapter of his book to his etropy idex ad it s decompositio by race ad regio based o US data (pp ). I the same year Bhattacharya ad Mahalaobis used Theil s decompositio method to decompose ii coefficiet. This study, which Bhattacharya ad Mahalaobis used the term ii s mea differece for determiig regioal disparities i icome distributio, is attributed as the first attempt of ii decompositio (Dagum, 1997, p.516). ii s mea differece is the arithmetic average of absolute differeces of the all icome pairs (Se, 1997, p.31). I oe of his studies that provided a differet perspective i decompositio of icome iequality measures literature, Rao (1969, p.418) proposed two differet procedures to decompose a icome iequality measure, by subpopulatio or by icome source. These two differet procedures demostrated the mai differece betwee ii coefficiet ad etropy idexes i the decomposability debate (Mussard et al., 2005, p.2). ii coefficiet s decompositio gives a extraordiary betwee-group compoet as it icludes the differeces betwee all icome pairs, whereas traditioal two-term method cosists of withi ad betwee iequalities, applied as i the geeralized etropy class of measures (Mussard et al., 2005, p.2). Sice ii coefficiet derived from the mea differece which is the average of absolute differeces of all icome pairs, it ca overestimate the cotributio of the betwee-group iequalities to the total iequality. However, geeralized etropy measures, which iclude Theil idex, compute betweegroup compoet of iequality simply over the icome differeces of group meas (Mussard et al., 2005, p.2). The commo defiitio of the geeralized etropy idexes adopted as decomposable i the literature is give by: I 1 ( 1) k 1 i1 y i y i 1 (1) where y i is the icome uits of a populatio P (i=1,...,) with icome average µ which is partitioed to k subgroups P (=1,...,k) with each size ad average icome µ. Theil (T), Hirschma-Herfidahl (H-H) ad Bourguigo (B) idexes are the particular cases of geeralized etropy class of measures (Mussard et al., 2003, p.2). Whe β teds towards zero Equatio 1 gives Theil idex: T lim I 0 1 k 1 i1 y i y i log (2) 61

4 H-H idex is the particular case of geeralized etropy measures whe β teds towards oe i the geeral defiitio: H H lim I k 1 i1 y i y i 1 Dagum, demostrate that Bourguigo s idex is aother special case of geeralized etropy class of measures whe β teds towards 1 (Mussard at al., 2003, p.3). The, Bourguigo idex is defied as follows where M g is the geometric mea of the populatio: B lim I 1 log log M g Before passig o to Dagum s ii decompositio, it would be helpful to metio the decompositio of geeralized etropy idexes to uderstad the mai differece betwee the decompositio of ii coefficiet ad this class of measures. eeralized etropy idexes are decomposed ito two compoets, withi ad betweegroup cotributios: Withi-group cotributio: (3) (4) I w k 1 I w (5) Betwee-group cotributio: I b 1 ( 1) k 1 1 (6) The, geeralized etropy idexes are defied as the followig sum of these two compoets: I w b I I (7) It ca be said that Bourguigo s 1979 article made the most importat ad ifluetial cotributio o decomposability, i which he defied the decomposable icome iequality measures (Dagum, 1997, p.516). Accordig to Bourguigo, a decomposable icome iequality measure is a measure such that the total iequality of a populatio ca be broke dow ito weighted average of the iequality existig withi subgroups of the populatio ad the iequality existig betwee them (1979, p.902). I 1980 Shorrocks defied the class of additively decomposable measures i his article where he agreed with the coclusio of Bourguigo. Accordig to this classificatio, Shorrocks defied additively decomposable measures as weighted sum of subpopulatios iequalities ad iequalities betwee groups mea differeces (1980, p.613) ad decided that the geeralized etropy idexes are the oly class of icome iequality measures that have the ubiased decomposability property (1984, p.1383). After Bourgoigo ad Shorrocks, 62

5 EZİ KAYA AND UMİT SENESEN Mookheree ad Shorrocks s presetatio of iteractio effect i ii decompositio, that is caused by differeces i mea icome ad overlap icomes of the differet groups, ad their coclusios (Mookheree & Shorrocks, 1982, p.888) made latter researchers to believe ii is ot a good decomposable icome iequality measure (Mussard at al., 2005, p.2). I the followig years, importat cotributios to icome iequality decompositio cotext were made by Cowell (1980), Cowell ad Kuga (1981), Frosii (1989) ad Shorrocks (1984). Despite the belief of o-decomposability of ii coefficiet, its use is wideed as a icome iequality measure i the literature ad it made aother group of researchers to cocetrate o the decompositio of ii, such as Rao (1969), Pyatt (1976), Das ad Parikh (1982), Lerma ad Yitzhaki (1985), Silber (1989), Yitzhaki (1994). The base of the coflict o the decomposability of a iequality measure is the idetificatio of betwee-group iequalities, ad ca be cosidered as a problem of measurig distaces betwee distributios (ertel et al., 2002, p.4). Measurig the distace betwee two distributios meas idetifyig the icome iequalities betwee icome distributios. To simplify, let us assume that populatio cosists of two subpopulatios with equal variaces. I Figure 1 the distace betwee two o-overlappig distributios (P h ad P ) ca be idetified by calculatig the ratio of total differece, the sum of absolute differeces betwee the icomes of the lower-mea icome distributio (P h ) ad icomes of the higher-mea icome distributio (P ), to umber of total observatios or directly takig the differece of mea icomes. FIURE 1. TWO NON-OVERLAPPIN INCOME DISTRIBUTIONS P h P 63

6 However if the two distributios overlap as i Figure 2, while defiig the distace betwee them, there is a allocatio problem of the icomes i the overlappig area. I Figure 2, i the areas idicated as I ad III pose o problem, sice the differeces betwee observatios i higher-mea icome group (P ) ad lower-mea icome group (P h ) are idisputably positive. FIURE 2. OVERLAPPIN INCOME DISTRIBUTIONS P h P However i area II some observatios i P have lower icomes tha some of the observatios i P h ad vice versa. This causes a overestimatio of the average of absolute differeces betwee two groups. Cosequetly, there is a probability of a allocatio error i area II. I 1997, Dagum criticised the former decompositio methods ad claimed that betweegroup iequality would ot be a good statistical measure whe it is derived from group meas (Dagum, 1997, p.516). Accordig to Dagum this decompositio method, which fids withi ad betwee-group iequalities computed usig group meas, makes oversimplificatio. The two-term decompositio method does ot take the cases ito cosideratio i which icome distributios are ot ormally distributed with uequal variaces ad igores the icomes i the overlappig area of two distributios (Dagum, 1997, p.515). Sice icome distributios are ot ormally distributed ad do ot have equal variaces, Theil s (1967) ad Bhattacharya ad Mahalaobis s (1967) method of decompositio, which is very similar to oe-way aalysis of variace, is iappropriate. As a cosequece, derivig betwee-group iequalities from group meas is ot a proper method for icome distributios which differ i variace ad asymmetry. Therefore Dagum suggested a decompositio method for ii coefficiet i three compoets, ii iequality withi subgroups ( w ), the et cotributio of the exteded ii iequality betwee subgroups ( b ) ad the cotributio of the itesity of trasvariatio betwee subgroups ( t ) ad proved that ii coefficiet is decomposable whe this method is used. 64

7 2. DAUM S INI DECOMPOSITION 1 EZİ KAYA AND UMİT SENESEN I this sectio Dagum s decompositio approach for ii coefficiet, which covers the cotributios of all icome uits to iequality, will be discussed. For this purpose let y i (i = 1,, ) shows icome uits i the populatio P of size. The cumulative icome fuctio, mea icome ad ii coefficiet of P are symbolized as F(y), µ ad respectively. If populatio P is partitioed ito k groups accordig to their socioecoomic properties (geder, educatio, regio, etc.) ad is the size ad µ ( = 1,, k) is the mea icome of the -th group (P ) respectively, the ii coefficiet for P is give by: i r i1 r1 (8) 2 2 y y ii coefficiet for the subpopulatio P (withi ii coefficiet) is: y y i r i1 r1 (9) 2 2 ad betwee-group ii coefficiet that measures the iequality betwee two subpopulatios is; h 1 r1 (10) ( ) i h h y i y h hr The weights are the populatio share ad the icome share for the subpopulatio P ad defied as follows: p ad s (11) The icome uits i the overlappig area of the two distributios are the mai reaso for usig group meas i the former methods to calculate the cotributio of betwee-group iequality ad the source of the belief i the literature that ii is ot decomposable. Dagum defied two cocepts for these uits of itersectio area. The first oe, gross ecoomic affluece betwee -th ad h-th groups, is defied as, 1 See Dagum (1980), Dagum (1997), Mussard (2005), Mussard et al. (2003, 2005), Dagum (2006). 65

8 66 y d h df ( y) ( y x) dfh ( x) h. (12) 0 0 where μ > μ h ad y i > y rh ad F (y) ad F h (x) are the cumulative distributio of groups ad h respectively. This term uses the differeces betwee all icome pairs y i - y rh oly for each y i of -th group is higher tha y rh of h-th group give that -th group s mea icome is higher tha h-th group s mea. The secod cocept is the first-order momet of trasvariatio that shows the icome differeces betwee -th ad h-th groups, where μ > μ h ad y i < y rh. y p h dfh ( y) ( y x) df ( x) h. (13) 0 0 This term, cotrary to the previous oe, is computed over the differeces betwee all icome pairs y i -y rh oly for each y rh of h-th group is higher tha y i of -th group give that -th group s mea icome is higher tha h-th group s mea. Accordig to these two cocepts, the ormalized measure of the distace betwee two subpopulatios, relative ecoomic affluece, is defied as follows: D ( d p ) h h h (14) ( d h p h) The values of D h lie i the iterval [0,1]. It equals oe whe the two probability desity fuctios do ot overlap ad it becomes zero whe the two distributios are idetical. I other words, whe the two distributios get away from each other, D h teds towards oe. I this case the et betwee-group ii coefficiet is: k 1 2 h1 b D ( p s p s ) (15) h h h h b measures the iequality i the o-overlappig area of -th ad h-th groups icome distributios. This compoet is the expressio of et cotributio of betwee-groups iequality to total icome iequality. The cotributio of itesity of trasvariatio betwee-groups t, is the secod compoet of the ii coefficiet ad shows the iequality computed from the overlappig area of the -th ad h-th groups: k 1 2 h1 t (1 D )( p s p s ) (16) t h h h h demostrates the iequalities betwee icome pairs i the overlappig area of subpopulatios icome distributios. The sum of et betwee-group ii coefficiet ad the cotributio of itesity of trasvariatio betwee-groups give the gross betweegroup ii coefficiet. gb b t (17)

9 EZİ KAYA AND UMİT SENESEN Thus, betwee-group icome iequality measure gb is derived from all icome uits ot ust from the icome meas as it is i the decompositio of geeralized etropy idexes. The third ad the last compoet is withi-group ii coefficiet w ad defied as follows: w k 1 p s (18) Cosequetly, for a populatio P with icome uits ( = 1,,k), which is partitioed i k subpopulatios, the ii decompositio i three terms ca be show as: w b t (19) Fially, ii coefficiet is decomposed by groups as: w gb (20) I this ii decompositio method, total ii coefficiet is equal to sum of the three compoets ad the iterpretatio of the compoets is rather easy. 3. ENERAL FINDINS Aalyses i this sectio are based o the data give by 2005 Household Budget Survey of Turkish Statistical Istitute (TURKSTAT) Household Budget Survey is coducted o a total of 720 (mothly) ad 8640 (aually) sample households that chaged every moth ad selected by stratified two-stage clustered samplig method i overall Turkey for a period betwee Jauary 1 ad December 31, Household budget surveys cover ot oly variables of household ad cosumptio expeditures but also variables related to idividuals demographic characteristics (age, geder, ad educatio level), employmet variables (occupatios, ecoomic activity, labour status) i the survey moth ad durig previous year. Table 1a ad 1b preset the iformatio ecessary to decompose ii coefficiet. As it is see i Table 1a, all idividuals who have a yearly disposable icome i 2005 Household Budget Survey are icluded i the aalyses. The mea icome for these idividuals is 7668,088 TL ad the ii coefficiet for this distributio is 0,

10 TABLE 1.A. YEARLY PERSONAL DISPOSABLE INCOME BY ENDER (TL) eder Sample size ( ) Mea icome ( y ) Subpopulatio share p ) ( Icome share ( s ) ii coefficiet () Withi Betwee h Relative ecoomic affluece ( D h ) Female ,157 0,276 0,168 0,533 Male ,691 0,724 0,832 0,437 TOTAL ,088 1,000 1,000 0,473 0,528 0,584 Accordig to Table 1b the mea wage-icome of the 6193 idividuals over 12 years of age ad ecoomically active is 7160,768 TL ad the wage-icome ii coefficiet is 0,418. I this case the relative ecoomic affluece betwee geders is statistically sigificat both i disposable icome distributio ad wage-icome distributio at 0,01 sigificace level. As metioed before, relative ecoomic affluece is related to the ecoomic uits i the overlappig area. Accordig to the fidigs, the ecoomic distace betwee geders is higher i persoal disposable icome distributio tha it is i wage-icome distributio. I other words, i disposable icome distributio iequalities betwee geders make higher cotributio to total iequality tha it does i wage-icome. TABLE 1.B. YEARLY TOTAL WAE-INCOME BY ENDER (TL) eder Sample size ( ) Mea icome ( y ) Subpopulatio share p ) ( Icome share ( s ) ii coefficiet () Relative ecoomic affluece Withi Betwee ( D h ) h Female ,138 0,221 0,168 0,481 Male ,994 0,779 0,832 0,397 TOTAL ,768 1,000 1,000 0,418 0,453 0,371 The decompositio of ii coefficiet computed 2 from Table 1a ad 1b is give i Table 2. Although the ii coefficiets for disposable icome ad wage-icome are very similar, the decompositio results reveal that the et iequality betwee geders is more evidet i disposable icome distributio. 2 For the software used see Mussardat et. al. (2002). 68

11 EZİ KAYA AND UMİT SENESEN TABLE 2. INI DECOMPOSITION BY ENDER FOR DISPOSABLE INCOME AND WAE- INCOME w b gb Disposable icome 0,288 0,108 0,077 0,473 Wage-icome 0,276 0,053 0,089 0,418 t The fidigs i Table 2 ca be iterpreted as follows. The ii coefficiet for Turkey derived from idividual level disposable icome distributio is 0,473. This idicates a high icome iequality. Oe of the importat factors i this iequality is geder. The cotributio of the geder iequality to the total ii coefficiet is 0, ,077 = 0,185. I percetage terms it is a little higher tha 0,185 / 0,473 = % 39, i.e. early 2/5. If a similar aalysis doe for the wage-icome distributio, total ii coefficiet is 0,418. This also idicates a high iequality i wage distributio. The cotributio of the geder iequality to the total iequality is 0, ,089 = 0,142. The percetage represetatio of this is early % 34, a little more tha 1/3. I other words the effect of iequalities betwee geders i other factors of icome to the total icome iequality is more tha it is i wageicome. Fially Table 3a ad 3b, which compare ii decompositio ad geeralized etropy idexes, show the percetage share of each compoet. As it is see all geeralized etropy idexes, computed from icome meas, show similar results, but caot give ay iformatio about the cotributio of itesity of trasvariatio betwee females ad males. TABLE 3.A. CONTRIBUTIONS OF EACH COMPONENT OF THE INDEXES TO THE OVERALL INCOME INEQUALITY (%) Idex Withi-group iequality Betwee-group iequality Cotributio of the itesity of trasvariatio 60,85 22,85 16,30 T 92,41 7,59 - H-H 96,03 3,97 - B 93,90 6,10-69

12 TABLE 3.B. CONTRIBUTIONS OF EACH COMPONENT OF THE INDEXES TO THE OVERALL WAE INEQUALITY (%) Idex Withi-group iequality Betwee-group iequality Cotributio of the itesity of trasvariatio 65,95 12,64 21,41 T 97,15 2,85 - H-H 97,71 2,29 - B 97,76 2,24 - These geeralized etropy measures are ot adequate for two reasos. First, they cosider oly the mea icomes of groups rather tha icomes of all ecoomic uits; as a result they miss some importat details. Secod, they have o meas of determiig the cotributio of the itesity of trasvariatio, which is part of betwee-group disparities stemmed from the overlappig of two icome distributios. Therefore geeralized etropy measures ted to uderestimate the betwee-group iequalities. It ca be see i Table 3 that each of the geeralized etropy idexes shows less tha 10 % cotributio of betweegroup iequality for males ad females. The amout of cotributio is betwee 4,0 % ad 7,5 % for disposable icome distributio, ad eve less for wage-icome distributio (2,2 2,8 %). However Dagum s method for ii decompositio draws a differet coclusio. The effect of geder disparities computed from ii decompositio is 5 10 times of cotributios for disposable icome as it is derived from etropy idexes ad times for wage-icome. 70

13 EZİ KAYA AND UMİT SENESEN 4. COMPARISONS I the earlier part of this sectio we will first report our fidigs o relative ecoomic affluece ad their cotigecy coefficiets o several classificatios based o geder, educatio levels, areas ad sectors, oce for disposable icome ad oce for wage-icome. The the similar figures betwee geders will be displayed for several icome compoets. I the later part ii decompositios of disposable icome ad wage-icome based o similar categories as before ad geder decompositios of several icome compoets. The fidigs o relative ecoomic affluece are summarized for disposable icome i Figure 3a ad for wage-icome Figure 3b. The legths of the top ie lies i Figure 3a represet, i terms of disposable icome, the relative ecoomic affluece betwee the demographic categories is writte o the same lie at their left. So the lowest relative ecoomic affluece is betwee urba ad rural populatios, the highest is betwee illiterates ad college graduates, i.e. the icome differeces are smallest betwee urba ad rural classificatio ad largest betwee illiterates ad uiversity graduates. The relative ecoomic affluece for geder is i the middle of these ie lies. That is to say the icome discrepacy for geder is more severe tha urba rural discrepacy ad the discrepacies of literate people at several educatio levels. O the other had geder discrepacy is less severe tha it is for agricultural ad o-agricultural sectors ad betwee illiterates ad people at several levels of educatio. The lower eight lies express the effect of geder discrepacy i each type of demographic categories. It is highest i agricultural sector, ad the comes rural area ad it is followed by secodary educatio level. I Figure 3b similar comparisos are displayed for wage-icome this time. It is iterestig to ote that geder discrepacy plays a lesser role o iequality i wage-icome distributio tha all the other demographic categories o the top 11 lies. eder plays a small role i the iequality of wage-icome distributio i public sector. It is most ifluetial amog primary school graduates ad illiterates, followed by private sector wage-earers. It ca be said that i geeral the role of geder discrepacy is more evidet i disposable icome distributio tha it is i wage-icome distributio. 71

14 FIURE 3.A. RELATIVE ECONOMIC AFFLUENCE FOR DISPOSABLE INCOME (D) Disposable Icome Urba Rural Secodary Tertiary Primary Secodary Primary Tertiary Female Male Agricultural No-agricultural Illiterate Primary Illiterate Secodary Illiterate Tertiary Urba: Female Male Rural: Female Male No-agricultural: Female Male Agricultural: Female Male Illiterate: Female Male Tertiary: Female Male Primary: Female Male Secodary: Female Male 72

15 EZİ KAYA AND UMİT SENESEN FIURE 3.B. RELATIVE ECONOMIC AFFLUENCE FOR WAE-INCOME (D) Wage-icome Female Male Primary Secodary Urba Rural Public SEE Illiterate -Primary Secodary Tertiary Public Private Illiterate -Secodary Primary Tertiary Private SEE Illiterate Tertiary Rural: Female Male Urba: Female Male Public: Female Male SEE: Female Male Private: Female Male Secodary: Female Male Tertiary: Female Male Illiterate: Female Male Primary: Female Male 73

16 The fidigs about relative ecoomic affluece betwee geders for disposable icome ad its various compoets are summarized i Figure 4. Figure 4a reveals that the highest geder discrepacy is i agricultural icome. It is higher tha that of disposable icome itself. The o-labour o-agricultural icome comes which is further classified ito etrepreeurship icome ad owership icome i Figure 4b. The geder gap is ot statistically sigificat i owership icome. It is surprisig to see that i trasfer icome the positio of females is better tha that of males. It is the oly exceptio to the fact that mea icome for females is always lower tha the mea icome for males i every compoet of icome but it should be added that, sice relative ecoomic affluece is so small i this case that the two trasfer icome distributios for males ad females are almost completely overlapped. I Table 4a relative ecoomic affluece (D) figures for each compariso are depicted as well as the results of a test proposed by Dagum. It is a approximate test (Kolmogorov- Smirov oe-sided two-sample D + statistics) for testig statistical sigificace of relative ecoomic affluece (1980, p.1798). For large samples, Kolmogorov-Smirov D + statistics coverges to the chi-square distributio with two degrees of freedom (Dagum, 2006, 3402): 4 r ( r s ( D s ) ) 2 2 (2) (21) The sigificace levels of these χ 2 values are obtaied from the statistical tables ad cotigecy coefficiets are calculated. Both are displayed i the same table. All χ 2 values, except oe belogig to geder discrepacy for SEE which has very small umber of observatios ayway, are statistically sigificat at 0,001 level. The cotigecy coefficiets, which idicate the power of the effect of the discrepacy, are higher for larger relative ecoomic affluet figures as expected. The highest of them (0,69) for both disposable icome ad wage-icome distributios, is betwee illiterates ad uiversity graduates. It is also high for agricultural o-agricultural discrepacy i disposable icome ad betwee private ad public sectors wage earers for wage-icome. It ca be oted that the geder discrepacy is highly powerful i agricultural sector, amog primary ad secodary school graduates ad i rural areas for disposable icome ad amog illiterates ad primary school graduates i wage-icome. 74

17 EZİ KAYA AND UMİT SENESEN FIURE 4. RELATIVE ECONOMIC AFFLUENCE BETWEEN ENDERS FOR VARIOUS INCOME COMPONENTS (D) 75

18 TABLE 4.A. RELATIVE ECONOMIC AFFLUENCE (D) AND CONTINENCY COEFFICIENT (C) D h χ 2 C Disposable icome Female Male 0, ,10 ** 0,46 Urba Rural 0, ,63 ** 0,25 Agricultural No-agricultural 0, ,55 ** 0,53 Illiterate Primary 0, ,36 ** 0,37 Illiterate Secodary 0, ,64 ** 0,60 Illiterate Tertiary 0, ,19 ** 0,69 Primary Secodary 0, ,03 ** 0,36 Primary Tertiary 0, ,59 ** 0,33 Secodary Tertiary 0, ,31 ** 0,39 Illiterate: Female Male 0, ,03 ** 0,37 Primary: Female Male 0, ,06 ** 0,51 Secodary: Female Male 0, ,76 ** 0,46 Tertiary: Female Male 0, ,58 ** 0,40 Rural: Female Male 0, ,93 0,46 Urba: Female Male 0, ,65 ** 0,44 Agricultural: Female Male 0, ,44 ** 0,54 No-agricultural: Female Male 0, ,11 ** 0,19 Wage icome Female Male 0, ,19 ** 0,29 Urba Rural 0, ,57 ** 0,34 Public SEE 0, ,04 ** 0,16 Public Private 0, ,68 ** 0,51 Private SEE 0, ,05 ** 0,16 Illiterate Primary 0, ,97 ** 0,33 Illiterate Secodary 0, ,87 ** 0,59 Illiterate Tertiary 0, ,96 ** 0,69 Primary Secodary 0, ,00 ** 0,33 Primary Tertiary 0, ,03 ** 0,49 Secodary Tertiary 0, ,39 ** 0,51 Illiterate: Female Male 0, ,02 ** 0,51 Primary: Female Male 0, ,62 ** 0,45 Secodary: Female Male 0, ,32 ** 0,36 Tertiary: Female Male 0, ,69 ** 0,41 Rural: Female Male 0, ,68 ** 0,31 Urba: Female Male 0, ,04 ** 0,35 Private: Female Male 0, ,41 ** 0,39 Public: Female Male 0, ,92 ** 0,13 SEE: Female Male 0, ,01 * 0,31 ** ** 0,001 sigificace level * 0,10 sigificace level 76

19 EZİ KAYA AND UMİT SENESEN Table 4b gives relative ecoomic affluece betwee geders for various icome compoets as well as correspodig χ 2 values ad their cotigecy coefficiets. The most sigificat geder discrepacy is i agricultural icome i terms of both relative ecoomic affluece ad cotigecy coefficiet. The same discrepacy is also powerful i disposable icome distributio. TABLE 4.B. RELATIVE ECONOMIC AFFLUENCE BETWEEN ENDERS FOR VARIOUS INCOME COMPONENTS (D) AND CONTINENCY COEFFICIENT (C) D h χ 2 C Disposable icome 0, ,10 ** 0,46 Wage icome 0, ,19 ** 0,29 Labour icome 0, ,70 ** 0,33 No-labour o-agricultural icome 0, ,06 ** 0,30 Owership icome 0, ,74 0,03 Etrepreeurship icome 0, ,58 ** 0,16 Agricultural icome 0, ,43 ** 0,50 Trasfer icome 0, ,29 ** 0,08 ** sigificat at 0,001 level So far we have dealt with the relative ecoomic affluece values but ow we ca tur our attetio to the decompositio of ii coefficiet. Figure 5a shows ii decompositio of disposable icome. The total legth of each lie represets the size of ii coefficiet for the related discrepacy i disposable icome distributio. Each of the three parts of the lie correspods to the compoets of ii coefficiet: the leftmost part up to the black poit is et betwee-group ii coefficiet, the middle part betwee black dot ad plus sig is the cotributio of itesity of trasvariatio betwee-groups ad the rightmost part is withi-group ii coefficiet. The same applies to Figure 5b which displays similar iformatio for wage-icome distributio. Whe the geder discrepacy is compared with the other discrepacies i terms of et betwee-group ii coefficiet it comes ust after agricultural o-agricultural sectors but it has stroger ifluece tha the urba rural ad several educatio levels discrepacies. However both agricultural ad o-agricultural sectors are also heavily affected by the geder discrepacy itself as ca be see o the seveth ad eighth lies i Figure 5a. 77

20 FIURE 5.A. INI DECOMPOSITION OF DISPOSABLE INCOME Disposable Icome Agricultural-No agricultural Female-Male Urba-Rural Illiterate-Primary-Secodary-Tertiary Rural: Female-Male Urba: Female-Male Agricultural: Female-Male No-agricultural: Female-Male Primary: Female-Male Illiterate: Female-Male Secodary: Female-Male Tertiary: Female-Male b t w 78

21 EZİ KAYA AND UMİT SENESEN FIURE 5.B. INI DECOMPOSITION OF WAE INCOME Wage icome Urba-Rural Female-Male Public-Private-SEE Illiterate-Primary-Secodary-Tertiary Urba: Female-Male Rural: Female-Male Private: Female-Male SEE: Female-Male Public: Female-Male Illiterate: Female-Male Primary: Female-Male Tertiary: Female-Male Secodary: Female-Male b t w 79

22 Accordig to Figure 5b geder discrepacy i overall wage-icome is almost as much ifluetial as urba rural discrepacy i terms of et-betwee groups ii coefficiet. eder discrepacy i urba ad rural areas ad also i private sector has highly strog effects o the iequality of wage-icome distributios i each of these categories. This geder effect gets smaller i various educatio levels, the weakest beig amog secodary school graduates. Figure 6 displays ii decompositio of various icome compoets by geder. It seems that the et betwee groups (ad also gross betwee-groups) ii coefficiets are rather small i almost all icome compoets. It meas that geder discrepacy loses its power whe we move ito the compoets of icome. Nevertheless it ca be said that it has the highest value i agricultural sector ad the lowest value i trasfer icome which icludes various subcategories such as child beefit, uemploymet pay, pesio paymets, ad scholarships for studets, etc. 5. RESULTS It ca be see i the aalysis give above that the geder discrepacy plays a importat role i icome distributio i Turkey. It costitutes a rather large chuk of ii coefficiet for disposable icome ad wage-icome distributios, the first havig a cosiderably higher share tha the latter. The ifluece of geder discrepacy is almost as high as the discrepacy betwee agricultural ad o-agricultural sectors. O the other had agricultural sector, which has almost equal umbers of female ad male workers i Turkey, is iflueced by icome iequality caused by female male discrepacy itself. Accordig to our fidigs private sector, as compared to public sector, has a more powerful icome iequality based o geder discrepacy. Whe cosiderig desigig policies to lesse the icome differeces betwee females ad males it is hoped that the fidigs of this paper might help to the policy makers i Turkey. Sice Dagum s method of decompositio of ii coefficiet is rather ew, there is o other comparable study, as far as we kow, i ay other coutry so we did ot have ay opportuity for cross-coutry comparisos. For the same reaso, it was also impossible to compare our fidigs for ay earlier study for Turkey. 80

23 EZİ KAYA AND UMİT SENESEN FIURE 6. INI DECOMPOSITION OF VARIOUS INCOME COMPONENTS BY ENDER Agricultural icome Disposable icome No-labour o-agricultural icome Labour icome Wage icome Trasfer icome Agricultural icome Disposable icome Labour icome Wage icome Etrepreeurship icome Trasfer icome Owership icome b t w 0 0,2 0,4 0,6 0,8 1 (a) 0 0,2 0,4 0,6 0,8 1 (b) 81

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