IDEAS home Printed from https://ideas.repec.org/a/gam/jecnmx/v5y2017i3p37-d110226.html
   My bibliography  Save this article

The Turkish Spatial Wage Curve

Author

Listed:
  • Haci Mevlut Karatas

    (Department of Economics, Syracuse University, 110 Eggers Hall, Syracuse, NY 13244-1020, USA)

Abstract

The wage curve for Turkey revisited considering the spatial spillovers of the regional unemployment rates using individual level data for a period of 2004–2013 at the 26 NUTS-2 level by employing FE-2SLS models. The unemployment elasticity of real wages is −0.07 without excluding any group of workers unlike previous studies. There is strong evidence on spatial effects of unemployment rate of contiguous regions on wage level, which is larger, in absolute value, than the effect of own-regional unemployment rate, −0.087 and −0.056, respectively. Male workers are slightly more responsive to the own-region unemployment rate than female workers. However, female workers are more responsive to the neighboring regions’ unemployment rate. Furthermore, using group-specific unemployment rates in the estimation of the wage curve for various groups, we find that unemployment elasticity of pay for female workers has become smaller and lost its significance, whereas unemployment elasticity for male workers has changed slightly. However, introducing group-specific unemployment rate results in losing significance in estimates for female workers. The findings in this paper suggest that individual wages are more responsive to the unemployment rates of the proximate regions than that of an individual’s own region. Also, the wage curve estimates are sensitive to the group-specific unemployment rates.

Suggested Citation

  • Haci Mevlut Karatas, 2017. "The Turkish Spatial Wage Curve," Econometrics, MDPI, vol. 5(3), pages 1-21, August.
    • Handle: RePEc:gam:jecnmx:v:5:y:2017:i:3:p:37-:d:110226
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2225-1146/5/3/37/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2225-1146/5/3/37/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2006. "Spatial Heterogeneity And The Wage Curve Revisited," Journal of Regional Science, Wiley Blackwell, vol. 46(4), pages 707-731, October.
    2. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 421-450, July.
    3. Badi H. Baltagi & Yusuf Soner Baskaya & Timur Hulagu, 2013. "How different are the wage curves for formal and informal workers? Evidence from Turkey," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 271-283, June.
    4. Ipek Ilkkaracan & Haluk Levent & Sezgin Polat, 2013. "Exploring different measures of wage flexibility in a developing economy context: the case for Turkey," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(3), pages 297-315, May.
    5. Baltagi, Badi H. & Baskaya, Yusuf Soner & Hulagu, Timur, 2012. "The Turkish wage curve: Evidence from the Household Labor Force Survey," Economics Letters, Elsevier, vol. 114(1), pages 128-131.
    6. Bernard FINGLETON & Silvia PALOMBI, 2013. "The Wage Curve Reconsidered: Is It Truly An 'Empirical Law Of Economics'?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 49-92.
    7. Heather Boushey, 2002. "Reworking the Wage Curve: Exploring the consistency of the model across time, space and demographic group," Review of Political Economy, Taylor & Francis Journals, vol. 14(3), pages 293-311.
    8. Bhaskar, V & To, Ted, 1999. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Economic Journal, Royal Economic Society, vol. 109(455), pages 190-203, April.
    9. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
    10. Baltagi, Badi H. & Blien, Uwe, 1998. "The German wage curve: evidence from the IAB employment sample," Economics Letters, Elsevier, vol. 61(2), pages 135-142, November.
    11. Baltagi, Badi H. & Rokicki, Bartlomiej, 2014. "The spatial Polish wage curve with gender effects: Evidence from the Polish Labor Survey," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 36-47.
    12. Konyalı, Gonca, 2012. "Wage Curve Evidence From Turkey’s 2007-2009 Income and Living Conditions Survey," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 24, pages 199-210.
    13. Ipek Ilkkaracan & Raziye Selim, 2003. "The role of unemployment in wage determination: further evidence on the wage curve from Turkey," Applied Economics, Taylor & Francis Journals, vol. 35(14), pages 1589-1598.
    14. Morrison, Philip S. & Papps, Kerry L. & Poot, Jacques, 2006. "Wages, employment, labour turnover and the accessibility of local labour markets," Labour Economics, Elsevier, vol. 13(5), pages 639-663, October.
    15. Raul Ramos & Catia Nicodemo & Esteve Sanromá, 2015. "A spatial panel wage curve for Spain," Letters in Spatial and Resource Sciences, Springer, vol. 8(2), pages 125-139, July.
    16. David Card, 1995. "The Wage Curve: A Review," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 285-299, June.
    17. Baltagi, Badi H. & Baskaya, Yusuf Soner & Hulagu, Timur, 2012. "The Turkish wage curve: Evidence from the Household Labor Force Survey," Economics Letters, Elsevier, vol. 114(1), pages 128-131.
    18. J. Paul Elhorst & Uwe Blien & Katja Wolf, 2007. "New Evidence on the Wage Curve," International Regional Science Review, , vol. 30(2), pages 173-191, April.
    19. Blanchflower, David G & Oswald, Andrew J, 1994. "Estimating a Wage Curve for Britain: 1973-90," Economic Journal, Royal Economic Society, vol. 104(426), pages 1025-1043, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Badi H. Baltagi & Yusuf Soner Başkaya, 2022. "Spatial wage curves for formal and informal workers in Turkey," Journal of Spatial Econometrics, Springer, vol. 3(1), pages 1-24, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Baltagi, Badi H. & Rokicki, Bartlomiej, 2014. "The spatial Polish wage curve with gender effects: Evidence from the Polish Labor Survey," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 36-47.
    2. Kosfeld, Reinhold & Dreger, Christian, 2019. "Towards an East German wage curve - NUTS boundaries, labour market regions and unemployment spillovers," Regional Science and Urban Economics, Elsevier, vol. 76(C), pages 115-124.
    3. Ana Barufi & Eduardo Haddad & Peter Nijkamp, 2016. "A comprehensive analysis of the wage curve in Brazil: Non-linearities, urban size, and the spatial dimension," ERSA conference papers ersa16p279, European Regional Science Association.
    4. Ana Maria Bonomi Barufi & Eduardo A. Haddad, Peter Nijkamp, 2016. "New evidence on the wage curve: non-linearities, urban size, and spatial scale in Brazil," Working Papers, Department of Economics 2016_39, University of São Paulo (FEA-USP).
    5. Badi H. Baltagi & Yusuf Soner Başkaya, 2022. "Spatial wage curves for formal and informal workers in Turkey," Journal of Spatial Econometrics, Springer, vol. 3(1), pages 1-24, December.
    6. Reinhold Kosfeld & Christian Dreger, 2018. "Local and spatial cointegration in the wage curve – a spatial panel analysis for german regions," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 38(1), pages 53-75, February.
    7. Badi H. Baltagi & Bartlomiej Rokicki & Kênia Barreiro Souza, 2017. "The Brazilian wage curve: new evidence from the National Household Survey," Empirical Economics, Springer, vol. 53(1), pages 267-286, August.
    8. Guilherme Cemin Paula & André M. Marques, 2022. "Brazilian Wage Curve: Further Evidence Based on Spatial Interactions in Times of Recession, 2012–2019," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(3), pages 689-708, September.
    9. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2006. "Spatial Heterogeneity And The Wage Curve Revisited," Journal of Regional Science, Wiley Blackwell, vol. 46(4), pages 707-731, October.
    10. Bernard FINGLETON & Silvia PALOMBI, 2013. "The Wage Curve Reconsidered: Is It Truly An 'Empirical Law Of Economics'?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 49-92.
    11. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
    12. Demidova, O. & Timofeeva, E., 2021. "Spatial aspects of wage curve estimation in Russia," Journal of the New Economic Association, New Economic Association, vol. 51(3), pages 69-101.
    13. Dieter von Fintel, 2016. "Wage flexibility in a high unemployment regime: spatial heterogeneity and the size of local labour markets," Working Papers 09/2016, Stellenbosch University, Department of Economics.
    14. Fingleton, Bernard & Palombi, Silvia, 2013. "Spatial panel data estimation, counterfactual predictions, and local economic resilience among British towns in the Victorian era," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 649-660.
    15. Víctor M. Montuenga‐Gómez & José M. Ramos‐Parreño, 2005. "Reconciling the Wage Curve and the Phillips Curve," Journal of Economic Surveys, Wiley Blackwell, vol. 19(5), pages 735-765, December.
    16. Esteban Sanroma & Raul Ramos, 2005. "Further Evidence on Disaggregated Wage Curves: The Case of Spain," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 8(3), pages 227-243, September.
    17. Cholezas, Ioannis & Kanellopoulos, Nikolaos C., 2015. "Labour market reforms in Greece and the wage curve," Economics Letters, Elsevier, vol. 136(C), pages 19-21.
    18. Marisa Carla Bucheli Anaya & Cecilia González Rodríguez-Villamil, 2012. "An estimation of the wage curve for Uruguay," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, June.
    19. Simonetta Longhi, 2012. "Job Competition and the Wage Curve," Regional Studies, Taylor & Francis Journals, vol. 46(5), pages 611-620, August.
    20. Bernard Fingleton & Simonetta Longhi, 2013. "The Effects Of Agglomeration On Wages: Evidence From The Micro-Level," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 443-463, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecnmx:v:5:y:2017:i:3:p:37-:d:110226. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.