Paper Title
The Redistributive Impact of the Financialization of Households: Evidence from Micro-Data for Turkey
Abstract
As finance capital took on a decisive role in the economy, more debates came into agenda. With the structural transformation in economies, financial sector began to include households more intensively through loans and financial incomes. Along with the state and corporate sectors, the household is one of the three basic sectors of the economy. In addition to purchasing housing and automobiles, households sometimes take out loans for their basic needs and invest their savings in various financial instruments. The expansion of the financial sector to include households has brought up an important question: How does greater adaptation to the financial sector affects the household's share of income and wealth?
This paper aims to analyze the impact of financialization on income distribution utilizing Turkey’s Household Budget Survey data (2002-2020). The study tests the effect of income from financial instruments other than the income from the household's primary job. Raw data shows that households earn extra income from the financial sector; interest from deposits and bonds, capital gains and dividends from stocks. The descriptive statistics show that those incomes exist at every income level. However, more detailed analyzes show that higher income groups receive a higher share, and their shares increase overtime.