Income distribution inequality and economic policy for the fight against poverty: An econometric analysis in selected OECD countries

Income inequality and the poverty it brings are among the biggest problems the whole world faces. Income distribution is not only an economic indicator but also a pioneer for the purposes of increasing the welfare levels of countries, making income distribution and the concept of poverty important. For this reason, it is necessary to examine the factors affecting the income distribution and the poverty it brings.In this study, the dimensions of income inequality and poverty will be analyzed and policies to combat these problems will be evaluated. Within the scope of these policies, econometric analyzes were made by focusing on direct taxes and transfer expenditures. Turkey has also been found between the data set in the year 2008 to 2017 consisting of 22 OECD countries were used. The relationship between income distribution unfairness and direct taxes and transfer expenditures was analyzed econometrically using panel data method. The Gini coefficient, which is a measure of income distribution, is the dependent variable, the percentage shares of direct taxes in total taxes, the percentage shares of transfer expenditures consisting of subsidies and other transfer expenditures in total public expenditures are used as independent variables. According to the findings, there is no causality relationship between the Gini coefficient and direct taxes. There is a one-sided causality relationship from direct taxes to transfer expenditures. In addition, a one-way causality relationship is observed from the Gini coefficient to transfer expenditures.