In this paper we use Turkish household labor force data to address a number of conceptual issues pertaining to the wage curve, an empirically derived negative relationship between the real wage level and the local unemployment rate. First, we show that in developing economies where labor markets are prone to high degree of segmentation by skill level, local unemployment rates disaggregated by education provide more accurate measures of the degree of group-specific wage competition and hence yield more robust results of the wage curve analyses. Second, we estimate the wage curve using various definitions of the unemployment rate, including discouraged and marginally attached workers, and the long-term unemployment rate to explore the most relevant measure of local labor market tension in the wage setting process. We find that broader definitions of unemployment serve as a more effective reference point in measuring wage flexibility for women, whose attachment to the labor market is substantially weak in the Turkish context; while for men the official and long-term unemployment rates perform well. Finally, using quantile regression we show that wage responsiveness to unemployment cannot be assumed to be constant along the wage distribution. In the Turkish case, we find a higher unemployment elasticity of wages around the median segment of wage distribution. This effect is more pronounced for women.
This paper studies the evolution of wage inequality in Turkey using household labour force survey data from 2002 to 2010. Between 2002 and 2004, the relative supply of more‐educated workers to less‐educated workers remained constant while their relative wages decreased in favour of less‐educated workers. However, between 2004 and 2010, the relative supply of more‐educated workers to less‐educated workers rose, while their relative wages remained constant or kept increasing in favour of more‐educated workers. This suggests factors other than those implied by a simple supply‐demand model are involved, such as skill‐biased technical change or minimum wage variations. The decomposition of wage inequality reveals that the price (wage) effect dominates the composition effect particularly in the first period. Our results show that the real minimum wage hike in 2004 corresponds to a major institutional change, which proved to be welfare‐increasing in terms of wage inequality. The upper‐tail (90/50) wage inequality decreased between 2002 and 2004 and stayed constant thereafter, whereas the lower‐tail (50/10) wage inequality decreased throughout the period. Our findings thus provide evidence supporting the institutional argument for explaining wage inequality.
Over the last decade, alongside high unemployment rates, the number of discouraged workers remained high in Turkey despite high growth rates. Moreover, the ratio of men among discouraged workers is relatively high compared with other OECD countries, where discouragement is thought to be related to gender issues. Discouraged worker literature mainly investigates differences in the transition rates from unemployment and discouragement to employment. A few studies, however, explicitly explore who becomes discouraged and why, especially in developing countries. This article aims to address the factors affecting the transition to discouragement in Turkey using pooled cross-sectional data between 2006 and 2011, and considering individual and household characteristics, as well as various local labor market conditions. Our findings indicate that both low qualifications and poor market conditions are associated with higher levels of discouragement.Au cours de la dernière décennie, le nombre de travailleurs découragés est resté élevé en Turquie, tout comme le taux de chômage, en dépit d'un taux de croissance économique élevé. De plus, la part des hommes au sein de cette population de travailleurs découragés est relativement élevée par rapport à d'autres pays de l'OCDE, où le découragement est supposément lié aux disparités entre les sexes. Les travaux qui portent sur le phénomène du travailleur découragé examinent principalement le taux de transition du chômage et celui du découragement vers l'emploi. Cependant, quelques études analysent explicitement les caractéristiques des travailleurs découragés et les raisons de leur découragement, en particulier dans les pays en développement. Cet article se penche sur les facteurs qui influencent la transition vers le découragement en Turquie, à l'aide de données transversales groupées entre 2006 et 2011. Nous tenons compte des caractéristiques individuelles et des ménages, ainsi que des différentes conditions du marché du travail local. Nos résultats indiquent que le faible niveau de qualification et les mauvaises conditions du marché du travail sont tous deux associés à un taux élevé de découragement.
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