Abstract:

Increases in income inequality in the post-1980 period have disruptive effects on economic and social life. This situation has increased the number of studies on income inequality in the economics literature. In this study, the relationship between economic growth and income inequality is investigated on a regional basis in Turkey. According to the Kuznets Curve Hypothesis, economic growth and income inequality have an inverted U-shaped relationship. Income inequality will increase in the early stages of growth, and as growth continues, decrease. There are studies on Turkey that test the Kuznets Curve Hypothesis and explore the link between economic growth and income inequality. However, the number of studies examining this relationship for a regional basis is limited. This study aims to contribute to this limited literature while estimating a panel data model using annual data for 12 regions in the period of 2007-2019. In the models in which the Gini coefficient is used to represent income inequality, it has been concluded that the relationship between economic growth and income inequality is U-shaped on a regional basis during the examination period. This finding contrast with Kuznets Curve Hypothesis. In addition, the coefficient of the dummy variable for the crisis year 2009 is positive. It shows that crises hurt the poor more. Another variable that increases income inequality is population. Findings in the P80/P20 ratio models, which are used as an alternative variable to represent income inequality, support the results of the previous model. However, the dummy variable does not have a significant effect.

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