Relative Underperformance Alla Turca

Tasso Adamopoulos () and Ahmet Akyol ()

Review of Economic Dynamics, 2009, vol. 12, issue 4, pages 697-717

Abstract: From 1960 to 2003, Turkey has underperformed relative to several Western economies, in terms of hours worked and output per hour. Our sectoral analysis illustrates two points. First, Turkey's large drop in hours is due to the fact that the substantial decline in agricultural hours has not been accompanied by a corresponding increase in nonagricultural market hours. Second, the sectoral composition of output is important for understanding Turkey's relatively weak rise in output per hour. We develop a simple model of structural transformation and home production to provide an account of Turkey's performance relative to the US and Southern Europe. We find that the evolution of exogenous differences in sectoral productivity and taxes, between Turkey and the US, as well as Southern Europe, can account quantitatively for most of Turkey's relative underperformance to these regions. (Copyright: Elsevier)

Keywords: Income differences; Labor input differences; Structural transformation; Taxes; Turkey (search for similar items in EconPapers)
JEL-codes: O11 O14 O4 E24 J22 (search for similar items in EconPapers)
Date: 2009
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