due to the polarizing trends of the Eastern regions (TRA and TRB) of Turkey compared with the rest of the country. While the rest of the country consistently has poverty rates around 20-30 percent, the Eastern regions have an average poverty rate that is much higher ranging from 40-60 percent. Moreover, the East has not experienced a high rate of poverty reduction.

Table 2. Poverty Convergence Trends (2006-2013)

|||$2.5/dayPPP|||$5/dayPPP||
|---|---|---|---|---|---|---|
||||Poverty|||Poverty|
|All Regions|Headcount|Poverty<br>Gap|<br>Gap<br>Squared|Headcount|Poverty<br>Gap|<br>Gap<br>Squared|
|Mean convergence|0.015|-0.040|0.000|0.009|0.014|0.018|
|Direct poverty effect|0.001|0.000|0.000|0.003|0.003|0.001|
|Povertyelasticity|-0.008|-0.008|-0.002|-0.008|-0.009|-0.009|
|_Convergence Elasticity_|**_0.007_**|**_-0.048_**|**_-0.002_**|**_0.004_**|**_0.008_**|**_0.011_**|
|No Eastern Regions(East=TRA,TRB)||$2.5/day PPP|||$5/day PPP||
|$2.5/day PPP|Headcount|Poverty<br>Gap|Poverty<br>Gap<br>Squared|Headcount|Poverty<br>Gap|Poverty<br>Gap<br>Squared|
|Mean convergence|-0.077|0.074|0.010|-0.056|-0.082|-0.114|
|Direct poverty effect|-0.017|-0.004|-0.002|-0.053|-0.035|-0.022|
|Povertyelasticity|-0.008|-0.006|0.001|-0.010|-0.009|-0.008|
|_Convergence Elasticity_|**_-0.102_**|**_0.065_**|**_0.009_**|**_-0.119_**|**_-0.126_**|**_-0.145_**|

_Notes_ : Income based poverty. Following the methodology in Ravallion (2012). No population weights. _Source_ : SILC and LFS 2006-2013, authors’ calculations.

When examining poverty convergence and excluding the Eastern regions, the convergence story changes. In the rest of the country there is a very large degree of poverty convergence at both poverty lines, the poverty convergence elasticity is -0.102 at the $2.5/day PPP line and -0.119 at the $5/day PPP line. This is impressive since across the world, poverty convergence has generally been absent due to poverty effects and poverty elasticity effects offsetting mean convergence effects. Additionally, at the $5/day PPP line, there is also convergence in the poverty gap and squared poverty gap indices.

Poor outcomes in the roof of Turkey (TRA, TRB) dampened the effects of poverty convergence. The Eastern regions in Turkey are primarily agriculture and there are also ethnic differences. Low poverty reduction is not from a lack of job growth; the Eastern regions have high employment growth rates (Figure 25). The issues are more likely related to the type of jobs that are being created. In 2006, the Eastern regions had poverty rates that were much higher than the rest of the country (Figure 6). Yet TR6 and TR5 regions also had similarly high levels and were able to experience much higher rates of poverty reduction. The growth of TR6 is due to expanding services sector along the Mediterranean coast, especially a tourist boom during the crisis period. From 2007 to 2012, new enterprises opened in inland cities in the Anatolia regions, but almost no businesses opened in the Eastern regions (World Bank 2014, Figure 5.5).

However, when using population weighted results, poverty convergence exists. This means that distribution of poverty across regions are not converging, but poverty among the number of poor is declining (see Table 18 for poverty convergence results with population weights). Regional disparities still exist despite overall poverty reduction at the national level.

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