Relationship between informal economy and educational level in Turkey

The informal economy covers a wide range of activities and it is called different names. It is hard to measure the informal economy. In Turkey, however, it is well known that the ınformal economy is very high. In terms of its reasons, it is classified four groups as economic, financial, political and administrative, moral and psychological. Reasons of informal economy and their effects vary from country to country. For Turkey, magnitude of reasons varies too. It is claimed negative and positive opinions about its effects. But its negative effects are more and more plausible. Education can be proposed as the factor that finishes the reasons of ınformal economy.In Turkey, the basic educational indicators, especially in the last period exhibit a positive image. İncreasing in ınvestments in education, literacy rate, teacher and graduated rates and quality in education can be seen in Turkey. This situation is promising for Turkey which has young population; because education has both personal and social benefits. In terms of benefits, education reduces inequality in income distribution, fertility and crime rates and unemployment; meanwhile it provides economic growth. Benefits of education are in association with the many reasons of informal economy. On the other hand, employment in informal economy and number of active people in underground economy reduces with the increase in education level.In conclusion, growth in educational investment and its quality reduces the dimensions of informal economy. This leads to efficient use of labor force and a higher life standard.