Household Structure and Household Income and its Components over the Life-Cycle in Turkey

Abstract

In this study, using the 2003 Turkish Household Budget Survey, we investigate the life-cycle profiles of household income and its components by educational attainment, compare these profiles with those reported for various developed and developing countries, and interpret our findings within the life-cycle framework. A key aspect of our analysis is that we examine the link between household structure and household income over the life-cycle. The main finding of the study is that household income profiles conditional on educational attainment in Turkey are non-decreasing and quite flat over the life-cycle. This is in stark contrast to the hump-shaped household income profiles reported for developed countries. There are three main reasons for this fact in Turkey: i) multiple families live together in the same household, especially when the household head is very young or old, and many single adult children who are employed live in their parents' households. In other words, household formation helps to smooth income. ii) Many household heads are still employed at end of their life-cycle, especially among the less-educated. iii) Pension income levels, for those who are qualified for them, are relatively high compared to other components of income.