IMPACT OF HEALTH AND EDUCATION EXPENDITURE ON POVERTY IN TURKEY

Abstract

Resources of poverty, role of the education and health expenditures for struggle against poverty are
important. In this paper, we aimed to find long and short-run relationships between poverty rate and
health expenditure, health expenditure and income distribution for Turkey over the period 2002-
2019. Firstly, stationary of the series were checked by unit root test and Johansen co-integration
tests were applied to test co-integration relationship among the variables. Long-run problems have
been eliminated with the Vector Error Correction Model (VECM). The imbalance that occurred in
the short term was corrected after about 1 years and stabilized in the long term. According to the
results, health expenditure and education expenditure impacted negatively on poverty rate and was
statistically significant. Income distribution also had positive impact on poverty and statistically
significant. It has been observed that education expenditures have a more important effect on the poverty rate
than the health expenditure and income distribution in the long run. In the study, a causality
relationship was found in the long term. However, a causality relationship has not been found in the
short term. Breaking the vicious circle of poverty is important to know to reduce the impact of this
process in future generations