Emprcial analysis of the impact of social expenditures on economic development in Turkey

Social expenditures are expenditures that increase the standard of living of the society. However, besides the contribution of these expenditures to the society, their contribution to the economy is also an important issue. In recent years, Turkey allocates more than 10% of its national income to social expenditures. The effects of the social expenditure item, which has such a significant share in the national income, on economic growth are an issue that needs to be examined. In this context, the aim of the study is to examine the effects of social expenditures on economic growth in Turkey between the years 1985-2019. In the first part of the study, the concepts of social expenditures and economic growth are examined. In the second part, the shares of social expenditures in national product in Turkey and selected OECD countries are analyzed comparatively in order to see how Turkey is in comparison to other countries in terms of social expenditures. In the third part, the effects of social expenditures on economic growth in Turkey are analyzed econometrically. ADF unit root test and ARDL bounds test were used in the analysis. The results of the analysis show that a 1% increase in the share of the national product allocated to social expenditures in Turkey increases the economic growth by 0.43% in the short term and by 0.48% in the long term. These results prove that social spending positively affects economic growth. In addition, in the study, it is concluded that the shares allocated to social expenditures in Turkey have increased gradually in recent years, but are behind most OECD countries.