Income inequality in Turkey: 2003-2015

Turkey's income inequality is one of the highest within the OECD countries. Despite a decline in Gini coefficient in the early years of the millennium, the gains have stalled, and inequality is rising again, resembling changing macroeconomic developments. This paper presents an investigation of income distribution in Turkey using evidence from inequality index decompositions by subgroup and by income source. The evidence suggests a close relationship between education of householder and inequality, while household formation became an important contributing factor in later years. Reliance on paid employment income and social transfers and decline in self-employment and asset incomes suggest an erosion in the incomes of middle classes.