Inter and intra-class distribution of income in Turkish manufacturing, 1970-2000
MEMİŞ, Emel (Yazar)
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The central contribution of this work is the identification of the determinants of the changes in the profit rates and wages among different subsectors of the Turkish manufacturing industry, with a major emphasis on the impact of changing conditions of external competition. In the Turkish manufacturing industry, the force of external competition reveals itself particularly when the State’s direct role in accommodating private returns diminishes. One outcome of this has been intensification of the conflictual features of the economic system, resulting in changes in the distribution of income between and within classes. A long-term analysis of the structure of profit rates and real wages at subsectoral level is the main analytical approach of the investigation. We generate a capital stock series using the ‘perpetual inventory method’ at the aggregate level for both private and public manufacturing sectors and at the two-digit level of ISIC (Rev.2) only for the private sector. With these capital stock series, we are able to in calculate profit rates. We then subject to analysis the profit rate data, both within and between classes, using a variety of analytical tools such as distribution frontiers and decomposition methods. As the state’s accommodating role recedes, we find, relative to the impacts of the ‘environmental’ factors, such as changes in trade related variables, an increasingly significant impact on distributional dynamics of conflict-based factors that have roots in changes in the bargaining power of labor vis-à-vis capital such as changes in the unionization index, the unemployment rate, the female share of employment. Estimates of profit rate effects provide evidence for direct impacts of the rise in the unemployment rate and the rising female share of employment on profit rate changes, consistent with the reserve army of labor and the feminization of labor hypotheses. We end by presenting a simple theoretical model with numerical simulations based on a conflicting claims framework, incorporating the insights from the methodological and conceptual discussions, which we find to have been supported by the empirical evidence.