Abstract:

The primary purpose of this study is to investigate the economic and institutional determinants of income distribution for Türkiye. In this study, the Gini coefficient was used as a dependent variable to represent income inequality, while economic factors such as economic growth, unemployment, and social transfer expenditures and institutional factors such as democracy and corruption were used as independent variables. The empirical findings obtained by using the annual data covering the period 1988-2016, and the ARDL bound test can be listed as follows: i) There is a long-run relationship between the variables. ii) Increases in democracy and social transfer expenditures reduce income inequality in the long-run. iii) Increases in economic growth and unemployment and betterment in corruption enhance income inequality in the long-run. Therefore, policymakers in Türkiye should design policies that will reduce unemployment and increase democracy, human capital, and share of social transfer expenditures in total public spending.

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