Self-employment and relative Poverty in Turkey Ahmet Yereli, Necmidden Bagdadioglu and Alparslan Basaran Hacettepe University, Department of Public Finance Turkey Session: Self-employment and Inequality 29 th General Conference of the IARIW Joensuu, Finland Discussed by Asghar Zaidi European Centre for Social Welfare Policy and Research Vienna, Austria

Aim of the research “….. to analyse the link between relative poverty and self-employment by calculating poverty and inequality indices……”

Analytical approach adopted Poverty profile of the overall population, across groups categorised by: –Age, sex and household size –Education –Regions and provinces Poverty profile of the self-employed Undeclared income and its disproportional impact on self-employed

Methodology Relative poverty concept is applied (using 50% of eq. median income as poverty line) Using OECD equivalence scales (1, 0.75, and 0.5) Only absolute number of poor people are reported Lots of results generated (27 tables in a 19 page paper!) using the HIES in 2003 …. no sensitivity analyses of any sort …. descriptive results only …. no details on how self-employed income is defined

Results Part I: Overall poverty profile

Results: Part I (continued) Other tables (2-14) –Region/ province –Age/ sex/ household structure –Health insurance –Education –Working sectors –Jobs –Employment status

Results: Part I (continued)

Results Part II: Poverty profile of self-employed 10 more tables (15-24) –Region/ province –Age/ sex/ marital status –Education/ Health insurance –Occupation / Industry –Whether work status declared to Social Security Institutions? I won’t be presenting all these results; apologies!

Results Part II: (continued) 87% of all self-employed are men; no gender differential in poverty risk 91% of them are married, and they also have same poverty risk as overall population (18%) One-half are below age 45; and they have a much higher poverty rate than older self-employed 60% are in skilled agricultural activities (slightly higher relative p.r.); those in elementary occupations have significantly higher p.r. 45% 75% of them do not declare their work status to the SSI; higher poverty rate for this group (23%)

Recommendations More rigorous analyses linking self-employment status and poverty risk Discuss issues linked with the different definitions of self-employment income More sensitivity analyses: –w.r.t. Equivalence scales –w.r.t. Poverty line, etc How results compare with other work on this topic (World Bank estimates and other studies)