The effect of regional education and health investments on income distribution and poverty in Turkey: An analysis on level-2 regions

Income distribution and poverty are among the main topics that economics is interested in. Both inequality in income distribution and poverty rates directly affect the development level and social welfare level of countries. Ensuring equality in income distribution and reducing poverty rates are important for countries. The public sector, which is an actor in the economy, is actively used in this process. The public sector ensures economic growth and development by making investments in education, health, transportation, communication, tourism, agriculture, mining, energy, manufacturing and housing. On the other hand, it is effective in income distribution and poverty rates. This study was conducted to examine the effects of total investments of the public sector, investments in education and health on income distribution and poverty for the level-2 regions of Turkey using data from the period 2014-2022. Since there is no study on the effects of total public investments, education and health public investments on income distribution and poverty rates in the literature review, the subject of our study was selected to fill this gap. The data used in the research were obtained from the Presidency of the Republic of Turkey Strategy and Budget Presidency, the Central Bank of the Republic of Turkey and the Turkish Statistical Institute. The Stata program was used in the study where panel data analysis was performed. Total public investments, education and health investments were used as independent variables in the established model. The dependent variables were the gini coefficient according to individual income, the gini coefficient according to household income, the number of poor and the poverty rate. All variables were realized with the regional consumer price index. According to the results obtained from the panel data analysis, no significant relationship was found between total public investments and income distribution and poverty. Investments in education and health improve the gini coefficient at the regional level and positively affect income distribution, while also reducing poverty rates. Regional investments in education and health should be used as an effective tool in solving the problems of ensuring equality in income distribution in the economy and reducing poverty rates.