Economic Liberalisation, Internal Migration and Income Inequality:
A Case Study for Turkey
Income inequality in the labor-abundant industrializing countries has not decreased in the recent decades in contrast with the predictions of the Stolper-Samuelson theorem (World Bank Development Indicators). The Stolper- Samuelson theorem suggests that as countries start trading with each other, income inequality decreases in the industrializing countries as production moves towards unskilled-labor intensive products, increasing the demand for unskilled labor. This paper seeks to illustrate that the supply-side determinants of labor markets, along with labor market policies have a significant impact on income inequality. Taking Turkey as a case study, this paper presents a qualitative analysis on sources of income inequality in the transition period to open-economy.
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