ABSTRACT

In this study the “Shorrocks Decomposition Analysis” has been used to determine the effects of the main and low income components to the income inequality on the basis of both households’ and individuals` incomes in Turkey, and all results have been assessed and interpreted for the years between 2002-2009. In conclusion, the interest income is determined as the largest contributor of the income components to income inequality. It has been much more prominent especially in the periods of economic crises. The contributions of the interest, profit and rent incomes into the inequality are higher than the contributions of wage and transfer incomes, and differ in a significant way. And it is essential to be designed the social policies more carefully, in order to reduce the contribution of transfer incomes to the total inequality