Published on November 26, 2007
HUMAN CAPITAL ACCUMULATION POLICY IN TURKEY IN THE EVE OF THE EU ACCESSION: HUMAN CAPITAL ACCUMULATION POLICY IN TURKEY IN THE EVE OF THE EU ACCESSION Muhsin KAR and Sami TABAN Kahramanmaraş Sütçü İmam University, Department of Economics K.Maraş / TURKEY Slide2: The relationship between human capital accumulation and economic growth has long been discussed among the development economists. The quality and quantity of Turkey’s human capital not only create an opportunity but also a thread in the accession process towards the EU. The aim of this presentation is to investigate the human capital accumulation policy in Turkey in the eve of the EU accession. INTRODUCTION Human Capital and Economic Growth: Human Capital and Economic Growth With the emergence of endogenous growth in the 1980s, the contribution of human capital to economic growth has received a new source of inspiration and become hotly debated issue. In the endogenous growth model, human capital is one of the non-decreasing sources of economic growth. In other words, human capital is one of the fundamental sources of economic growth. Most scholars accept that the education and health are the most important sources of human capital. Many studies underline the importance of education, as a factor of increased labor quality, in order to improve economic growth (e.g. Barro, 1991; Mankiw et al., 1992). Similarly, health could be considered as a significant factor to improve labor productivity. Indicators of Human Capital Accumulation in Turkey : Indicators of Human Capital Accumulation in Turkey The collection of data for human capital is not straightforward. Employing proxies are usually taken place in empirical studies. Secondary school enrolment rate (Barro, 1991), Human Development Index (Grammy and Assane, 1996) and the budgetary allocation of educational spending (Otani and Villanueva, 1990) have been used as a proxies of human capital. Slide5: The Calculation of the HDI The HDI is a summary measure of human development. It measures the average achievements in a country in three basic dimensions of human development (UNDP, 2002). - A long and healty life, as measured by life expectancy at birth. - Knowledge, as measured by the adult literacy rate (with two-thirds weight) and the combined primary, secondary and tertiarty gross enrolment ratio (with one-third weight). - A decent standart of living, as measured by, GDP percapita (PPP US$). The HDI is then calculated as a simple average of three dimension indices: HDI = (life expectancy index) + (education index) + (GDP index) / 3. Table 1: HDI Values in Turkey (1969-2002): Table 1: HDI Values in Turkey (1969-2002) Source: UNDP Reports, 2001-2004. Slide7: Graph 1: Human Development Index Trends in Turkey (1965-2002) Table 2: Labor Participation Ratio According to Gender, Living Place and Education (%) (2000): Table 2: Labor Participation Ratio According to Gender, Living Place and Education (%) (2000) Source: SIS, 2000, Results of Household Labor Census. Note: These figures includes 15-years old and above. The basic education covers the 8-years compulsory education implementing after 1997. Table 3: Labor Participation Ratio According to Gender, 1955-2000 (%): Table 3: Labor Participation Ratio According to Gender, 1955-2000 (%) Source: For 1955-1995, World Bank, 1993, Turkey Women in Development, A World Bank Country Study, Washington, D.C., s. 28. For 2000, SIS, 2000, Results of Household Labor Census. Table 4: Comparison of Turkey with the EU Countries in Terms of Human Development (2002)15-EU Countries and Turkey: Table 4: Comparison of Turkey with the EU Countries in Terms of Human Development (2002) 15-EU Countries and Turkey Table 5: 10 New Members and 4 Candidate Countries (2002): Table 5: 10 New Members and 4 Candidate Countries (2002) Source: Human Development Report- 2004. Table 6: Comparison of Education Level of Turkey with the EU Countries 15 EU Countries and Turkey: Table 6: Comparison of Education Level of Turkey with the EU Countries 15 EU Countries and Turkey Table 7: 10 New Members and 4 Candidate Countries: Table 7: 10 New Members and 4 Candidate Countries Table 8: Comparison of Health Level of Turkey with the EU Countries15 EU Countries and Turkey: Table 8: Comparison of Health Level of Turkey with the EU Countries 15 EU Countries and Turkey Table 9: 10 New Members and 4 Candidate Countries: Table 9: 10 New Members and 4 Candidate Countries Table 10: Disaggregated Public Expenditures in Turkey (As % of GNP): Table 10: Disaggregated Public Expenditures in Turkey (As % of GNP) Policy Implications: Policy Implications Education Turkey should continue and step up efforts to improve the attendance rate of poorer pupils, in particular in disadvantaged regions. While the 8th Five Year Development Plan was successful in increasing the schooling rate in secondary education, it did not succed in reducing the proportion of pupils attending general high school in favour of vocational technical schools. As regards reforming the education and training system, there has been impressive progress in the enrolment of girls, particularly in the south-eastern regions and eastern Anatolia, with the support of UNICEF and EU-funded educatin programmes. Slide18: Additionally, considerable progress has been made by the Turkish National Authorities and the Turkish National Agency concerning the participation in Community Programmes, Leonardo da Vinci and Youth. As it is emphasized in the Regular Report (EC, 2000), in the area of vocational training further reform measures are needed to increase the efficiency of the training system. The Turkish education and university system based on the Law on High Education is marked by a high degree of centralisation. It is necessary to reform the system of education to move universities away from a supply-driven structure to a labour market demand-driven structure (EC, 2003; EC, 2004). In its 1998 Report (EC, 1998), the Commission noted that despite Turkey’s efforts to bring the general level of education up to EU standarts, it still faced shortcomings in training provision, classes, teaching staff and personnel generally. Therefore, Turkey should continue its reform efforts in education and training and also needs to enchance links between labour market and education. Slide19: Health Turkey ranks far behind most middle income countries in terms of health status. Currently, Turkey has one of the most complex health care systems in the world. A wide array of health care providers, financiers, and organization arrangements has resulted in an inefficient system which increasingly fails to meet effectively the health needs of the country’s 70 million population. Slide20: The World Bank (2003) carried out a detailed study to examine the trends in health status of Turkey’s population. - The key findings of this study are: The health status of Turkey’s population is poor. There are huge locational and regional disparities in health outcomes across almost all indicators. The pirmary health care system is substantially underfunded and ineffective. Majority of general hospitals in Turkey are run inefficiently. There are huge gaps in the distribution of health personnel among the provinces and regions. There is little or no coordination between the Ministries of Health and Labor who, between them, control most financing and provision of health care in Turkey. Slide21: Very little spent on preventive care and on maternal and child health. Large segments of the population do not have adequate health insurance or any other form of financilal protection. The distribution of public expenditures on health is not equitable. - These findings suggest that in order to meet the ultimate objective of improving the health status of the people, fundamental and systemic changes would be required in the ways that health care is financed, delivered, organized and managed in Turkey. CONCLUSION: CONCLUSION This study aims to evaluate the human capital accumulation policy in Turkey. Currently, educational attainment of the Turkish population and labor force is by far the lowest of all OECD countries. Raising the educational qualifications of the population is a crucial requirement for improved labor productivity and employment growth in Turkey. It is also critical for making the country more competitive in the global economy and to meet the goal of EU accession. In addition, radical reforms are necessary in the health sector. Given the complex nature of the sector need to be accompained by reforms of the social security system. The Following activities emerge as priorities in Turkey: Continuing the reform of the education sector by moving to secondary and technical education with the objective of linking the curricula to labor market requirements and expanding and upgrading the skills base of the country. Advancing the reform of the health sector to make it more equitable and efficient.