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

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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 Center for Policy Research, Maxwell School, Syracuse University in its series Center for Policy Research Working Papers with number 134.

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Length: 10 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:max:cprwps:134

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Keywords: Wage Curve; Fixed Effects; Instrumental Variables; Two-Stage Least Squares;

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References

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  1. David Card, 1995. "The Wage Curve: A Review," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 285-299, June.
  2. 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.
  3. 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.
  4. Ozlem Onaran, 2002. "Measuring wage flexibility: the case of Turkey before and after structural adjustment," Applied Economics, Taylor & Francis Journals, vol. 34(6), pages 767-781.
  5. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
  6. Blien, Uwe & Baltagi, Badi H. & Wolf, Katja, 2000. "The East German Wage Curve: 1993-1998," ERSA conference papers ersa00p196, European Regional Science Association.
  7. David G. Blanchflower & Andrew J. Oswald, 1992. "International Wage Curves," NBER Working Papers 4200, National Bureau of Economic Research, Inc.
    • David G. Blanchflower & Andrew Oswald, 1995. "International Wage Curves," NBER Chapters, in: Differences and Changes in Wage Structures, pages 145-174 National Bureau of Economic Research, Inc.
  8. 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.
  9. Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers 340, London School of Economics - Centre for Labour Economics.
  10. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70, pages 538.
  11. Blanchflower, David G & Oswald, Andrew J, 1994. "Estimating a Wage Curve for Britain: 1973-90," Economic Journal, Royal Economic Society, vol. 104(426), pages 1025-43, September.
  12. 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.
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Cited by:
  1. Blien, Uwe & Messmann, Susanne & Trappmann, Mark, 2012. "Do reservation wages react to regional unemployment?," IAB Discussion Paper 201222, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Badi H. Baltagi & Yusuf Soner Baskaya & Timur Hulagu, 2012. "How Different are the Wage Curves for Formal and Informal Workers? Evidence from Turkey," Working Papers 1216, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  3. Yusuf Soner Baskaya & Timur Hulagu, 2011. "Informal-Formal Worker Wage Gap in Turkey: Evidence From A Semi-Parametric Approach," ERSA conference papers ersa11p409, European Regional Science Association.
  4. 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.
  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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