The Impact of Unemployment on Material Deprivation and the Incurred Extra Costs in Turkiye

This study aims to investigate the impact of unemployment on deprivation among individuals in Turkey and the additional costs unemployed individuals must bear to compensate for deprivation. The analyses in this study were conducted using panel data from the 2018-2021 Income and Living Conditions Survey of the Turkish Statistical Institute (TURKSTAT) and employed a fixed effects model. First, the deprivation index, an unobserved variable in the dataset, was estimated using the latent variable estimation method. The analysis revealed that unemployed individuals are more likely to experience material deprivation compared to employed individuals. According to the analysis, the estimated additional cost that unemployed individuals need to bear to achieve the living standards of employed individuals is 3560 TL per month. Moreover, the results indicate that age, marital status, education level, household type, and homeownership are other variables that significantly affect the deprivation index.