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The Turkish Wage Curve: Evidence from the Household Labor Force Survey

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Author Info

  • Baltagi, Badi H.

    () (Syracuse University)

  • Baskaya, Yusuf Soner

    () (Central Bank of Turkey)

  • Hulagu, Timur

    () (Central Bank of Turkey)

Abstract

This paper examines the Turkish wage curve using individual data from the Household Labor Force Survey (HLFS) including 26 NUTS-2 regions over the period 2005-2008. When the local unemployment rate is treated as predetermined, there is evidence in favor of the wage curve only for younger and female workers. However, if the lagged unemployment rate is used as an instrument for current unemployment rate, we find an unemployment elasticity of -0.099. We also find a higher elasticity for younger, less educated, low experienced workers than for older, more educated and more experienced workers. Another important finding is that the wages of females in Turkey are significantly more responsive to local unemployment rates than their male counterparts.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5633.

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Length: 10 pages
Date of creation: Apr 2011
Date of revision:
Publication status: published in: Economics Letters, 2012, 114 (1), 128-131.
Handle: RePEc:iza:izadps:dp5633

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Related research

Keywords: instrumental variables; fixed effects; wage curve; two-stage least squares;

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References

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  1. Ipek Ilkkaracan & Raziye Selim, 2003. "The role of unemployment in wage determination: further evidence on the wage curve from Turkey," Applied Economics, Taylor and Francis Journals, vol. 35(14), pages 1589-1598.
  2. Blien, Uwe & Baltagi, Badi H. & Wolf, Katja, 2000. "The East German Wage Curve: 1993-1998," ERSA conference papers ersa00p196, European Regional Science Association.
  3. Ozlem Onaran, 2002. "Measuring wage flexibility: the case of Turkey before and after structural adjustment," Applied Economics, Taylor and Francis Journals, vol. 34(6), pages 767-781.
  4. David Card, 1995. "The Wage Curve: A Review," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 285-299, June.
  5. David G. Blanchflower & Andrew J. Oswald, 1995. "An Introduction to the Wage Curve," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 153-167, Summer.
  6. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  7. 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.
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Citations

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Cited by:
  1. Ilkkaracan, Ipek & Levent, Haluk & Polat, Sezgin, 2012. "Exploring different measures of wage flexibility in a developing economy context: The case for Turkey," GIAM Working Papers 12-2, Galatasaray University Economic Research Center.
  2. Uwe Blien & Susanne Messmann & Mark Trappmann, 2012. "Do reservation wages react to regional unemployment?," ERSA conference papers ersa12p662, European Regional Science Association.
  3. Baltagi, Badi H. & Baskaya, Yusuf Soner & Hulagu, Timur, 2012. "How Different Are the Wage Curves for Formal and Informal Workers? Evidence from Turkey," IZA Discussion Papers 6836, Institute for the Study of Labor (IZA).
  4. Yusuf Soner Baskaya & Timur Hulagu, 2011. "Informal-Formal Worker Wage Gap in Turkey : Evidence From A Semi-Parametric Approach," Working Papers 1115, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  5. Konyalı, Gonca, 2012. "Wage Curve Evidence From Turkey’s 2007-2009 Income and Living Conditions Survey," Investigaciones Regionales, Asociación Española de Ciencia Regional, issue 24, pages 199-210.

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