Abstract:

Focusing on different façades of financial well-being such as wealth accumulation and retirement planning, various determinants of financial well-being have been unearthed, and financial literacy has emerged as a crucial factor that increases financial well-being. Hence, financial literacy has been an important policy instrument to increase the financial well-being of individuals, particularly given that it is relatively easy to implement. This paper is an attempt to pave the way for such policies in a group of middle income countries, namely Mexico, Lebanon, Uruguay, Colombia and Turkey. After establishing financial literacy levels, we identify the least financially literate groups in each country to facilitate targeting of public policy. We find that women, younger adults and individuals who cannot read or write in the official language of their country of residence have lower financial literacy scores. In line with the previous findings in the literature on the developed countries, our results indicate that financial literacy increases with education. We also show that it is not only the years of education, but also the quality. In Mexico and Turkey, there are large regional differences that must be addressed. We also find that differences in financial literacy across countries persist even when differences in structural characteristics are taken into account. A partial explanation may be provided by differences in financial inclusion.

Abstract:

The most prominent form of gender discrimination in the labor market is the gender gap in wages. Using the Wage Structure Survey, a firm-level data set, we study the gender wage gap in Turkey. We concentrate on formal employment as this is the jurisdiction of the Labor Code in Turkey. Although women earn 3% less than men on average, a wider look reveals important differences along the entire wage distribution. There is virtually no gender gap at the lower end of the wage distribution. More surprisingly, women seem to earn about 5 percent more than men at the top. Using quantile regressions which allow the study of the gender gap along the entire wage distribution, we find that women actually earn 8 percent less at the median. Moreover, at the high end of the wage distribution women earn 4.5 percent less than men once we control for differences in basic labor market characteristics such as education and labor market experience. The decomposition results reveal the unexplained part of the gender wage gap is actually larger than that observed in raw data.

Abstract:
This report presents the results of a highly simplified profiling exercise to demonstrate the initial steps of profiling and draw some initial conclusions on the types of clients that might be covered by activation policies in Turkey, and the extent of their socio-economic vulnerability as well as labor market employability. A key conclusion is that policy makers will need to decide whether to put the emphasis on the former or on the latter so that the dual objectives of protecting the vulnerable and helping them move out of transfer dependence are achieved. The initial profiling exercise shows that several large subgroups of the vulnerable comprise inactive females, often with limited or outdated skills. A priority might be to rethink the offer of public services involved in up-skilling the workforce, such as lifelong learning, in order to mobilize the largest identified segments. This Executive Summary reflects on four connected background papers. A conceptual framework first defines vulnerability and activation policies. A second background paper takes stock of the progress of activation policies in Turkey to date. A third background paper profiles the large and diverse group of vulnerable people in Turkey into units of higher or lower priority, while the final background paper examines how the capacity and skills of the vulnerable, especially those in the high priority units, can be built.

Abstract:

Understanding labor market dynamics in Turkey is a crucial part of the fight against unemploy- ment, which has proven to be one of the most important problems Turkish economy faces follo- wing the crisis in 2001. The labor force is still growing in Turkey due to a young population. Moreover, the structural transformation from agriculture to non- agricultural sectors still continu- es. In the past decade, unemployment rates have decreased in line with strong growth performan- ces except during the crisis. However, given that we are expecting a low growth period, the fight against unemployment will prove to be more difficult. This article discusses how labor market dynamics are affected by the structural problems of the labor market in Turkey, such as a young population with relatively low levels of education, a high share of employment in agriculture, wide-spread informality and low rates of female labor force participation. The article draws at- tention to structural reforms, which should to be implemented to prevent further increases in the unemployment rates.

Abstract

Recent achievement test results show that Turkish students have been performing poorly compared to students from other countries. Using science literacy results from the PISA 2006 survey, we aim to measure the determinants of student achievement in Turkey within the education production function framework. We find that program types have large effects on student achievement. Since many students are allocated across program types as a result of a centralized exam, we try to control for past academic achievement and also for differences in the average socioeconomic background of students in a given school. The results indicate that students cluster in schools according to their socioeconomic background, and previous academic record is important, however, the effects of program types persist. Policies to augment socioeconomic background, such as conditional cash transfers and lifelong learning programs that prioritize parents will increase educational output.