Wage Penalty for Temporary Workers in Turkey: Evidence From Quantile Regressions

Abstract

The paper estimates the wage gap between employees with different contract types in Turkey. We first employ a quantile regression method and then decompose wage differentials along the distribution. Our results indicate that nonpermanent contract holders are more common among the low-skilled and low-wage group. The findings imply a non-monotone pattern in Turkey where both sticky floor and glass ceiling effects are observable. These effects are persistent over time as both bottom-and topearner temporary workers are penalized, and the wage gap displays almost no change for each group. Also, from the quantile decomposition, we reveal that the wage gap for low earners is mainly attributable to labor market characteristics. On the other hand, returns are primarily responsible for explaining the wage gap for high earners, suggesting that they are subject to unfavorable conditions in the labor market.

Pay Gaps and Mobility for Lower and Upper Tier Informal Sector Employees: an investigation of the Turkish labor market

“…Moreover, we define lower and upper tier informal sector workers not only by self-employment but also by the irregularity of contracts. Temporary, casual workers and workers with no contracts might be subject to double penalty in the informal sector as their wages are expected to be lower than permanent contract holders even in formal employment (Duman, 2019). Irregular workers also have much lower chances of obtaining a formal sector job especially if they are unskilled, which is clearly the case in Turkey.…”

Wage differentials between temporary and permanent workers in Turkey

“…Ampirik uygulamalar incelendiğinde genellikle kalıcı işlerde çalışanlara göre geçici işlerde çalışanların ücretlerinin daha düşük olduğu, başka bir ifade ile geçici işlerin bir ücret cezalandırmasına yol açtığı ortaya çıkmıştır. Kantil regresyon yönteminin kullanıldığı çalışmalarda (Bosio, 2014;Comi & Grasseni, 2012;Duman, 2019;Lass & Wooden, 2019;Le & NguŁyen-Huu, 2016)…”

Non-standard Employment and Wage Differences across Gender: A Quantile Regression Approach

“…While a number of researchers argue that various benefits can accrue to employees in non-standard positions, such as better reconciliation of work and life and higher control over work schedules, it is shown that the positive effects are highly dependent on the context and atypical jobs, on average, have lower pay and less security (Booth et al, 2002;Gash and McGinnity, 2007;Cazes and de Laiglesia, 2015). Across a number of countries, large and persistent wage gaps exists between different types of contract holders (Duman, 2019;Garnero et al, 2016). Moreover, employees in precarious positions are subject to lower protection by labor legislation and union membership because of higher turnover and lack of integration of such workers into the collective bodies (Vosko et al, 2009;Grimshaw, 2011).…”

“…However, female employees at the beginning of their career are subject to higher risks of unemployment even when they have the same education with their male counterparts with fixed-term contracts (Kurz, 2002). With regards to wage effects of several types of NSE, sizable pay gaps across contract types in developed and developing countries are found, and it is shown that the earning differentials are not equal across genders (Duman, 2019;Cazes and de Laiglesia, 2015;Kahn, 2016;Gash and McGinnity, 2007). However, it should be noted that there is no agreement on the direction of the effect, as there are studies pointing out wage penalties as well as wage premiums for NSE, which also change along the distribution (Fuller and Vosko, 2008;Lass and Wooden, 2019).…”

“…Only after, 2012, the share of female employees in nonstandard jobs in Turkey began to marginally surpass the share of male employees. In 2017, these ratios were 23.4% and 19.5% for women and men respectively, and most of the decline of male NSE came from the reductions in informality iii rather than changes in temporary contracts or parttime jobs (for regulatory changes over this period, see Duman, 2019;Duman, 2014). While NSE is not necessarily unevenly distributed between male and female employees in Turkey, there are important variations with regards to the characteristics of these jobs.…”