The effect of social budget on poverty: Empirical analysis for Turkey and EU countries

Benefiting the poor from social expenditures made with a social budget approach can be a solution to the problem of poverty. It is expected that the income distribution will become more equal after expenditure and tax policies if direct taxes are given weight in the financing of social expenditures. Thus, it is expected that the tax burden on the poor will be felt less than indirect taxes. For this reason, the main purpose of the thesis is to analyze the share of expenditures made with the understanding of social budget in the GDP and the share of indirect-direct tax revenues in total tax revenues. The other purpose of the thesis is to investigate the effectiveness of the ratio of social protection benefits to GDP on the poverty rate in Turkey and EU countries with the panel data analysis method. The reason why social protection benefits, which are included in social expenditures, are preferred is that these expenditures do not include investment and management expenses and their benefits are directly for the poor. In empirical studies investigating the effect of social expenditures on poverty, social expenditures are considered as a whole. In this study, the effect of social protection benefits, which are included in social expenditures and whose effect is directly on the poor, and the effects of family, health, unemployment, retirement (old age, survivors and disabled people) benefits on the poverty rate are examined one by one. As a result of the empirical analysis, it has been found that the share of total social protection benefits to GDP has a decreasing effect on poverty rates (according to the median 50, 60 and 70%). In addition, it has been observed that family and health benefits have a decreasing effect on the poverty rate, while retirement benefits have an increasing effect. In addition, it has been determined that unemployment benefits have an increasing effect on the poverty rate compared to the median 70%.