IDEAS home Printed from https://ideas.repec.org/p/met/wpaper/1414.html
   My bibliography  Save this paper

Wage Inequality and Wage Mobility in Turkey

Author

Listed:
  • Aysit Tansel

    (Department of Economics, METU; Institute for the Study of Labor (IZA) Bonn, Germany; Economic Research Forum (ERF) Cairo, Egypt)

  • Basak Dalgic

    (Department of Public Finance, Hacettepe University)

  • Aytekin Güven

    (Department of Economics, Abant Izzet Baysal University)

Abstract

This paper investigates wage inequality and wage mobility in Turkey using the Surveys on Income and Living Conditions (SILC). This is the first paper that explores wage mobility for Turkey. It differs from the existing literature by providing analyses of wage inequality and wage mobility over various socioeconomic groups such as gender, age, education and sector of economic activity. We first present an overview of the evolution of wages and wage inequality over the period 2005-2011. Next, we compute several measures of wage mobility and explore the link between wage inequality and wage mobility. Further, we compute the transition matrices which show movements of individuals across the wage distribution from one period to another and investigate the determinants of transition probabilities using a multinomial logit model. The results show that overall the real wages increased over the study period and wage inequality exhibits a slight increase.. Wage inequality is one of the highest among the European Union (EU) countries. The wage mobility in Turkey is lower than what is observed in the European Union countries although it increases as time horizon expands. Wage mobility has an equalizing impact on the wage distribution, however; this impact is not substantial enough to overcome the high and persistent wage inequality in Turkey.

Suggested Citation

  • Aysit Tansel & Basak Dalgic & Aytekin Güven, 2014. "Wage Inequality and Wage Mobility in Turkey," ERC Working Papers 1414, ERC - Economic Research Center, Middle East Technical University, revised Nov 2014.
    • Handle: RePEc:met:wpaper:1414
    as

    Download full text from publisher

    File URL: http://erc.metu.edu.tr/en/system/files/menu/series14/1414.pdf
    File Function: First version, 2014
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Aysit Tansel & Fatma Bircan Bodur, 2012. "Wage Inequality and Returns to Education in Turkey: A Quantile Regression Analysis," Review of Development Economics, Wiley Blackwell, vol. 16(1), pages 107-121, February.
    2. Richard V. Burkhauser & John G. Poupore, 1997. "A Cross-National Comparison Of Permanent Inequality In The United States And Germany," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 10-17, February.
    3. Andrea Garnero & Stephan Kampelmann & François Rycx, 2013. "Minimum Wage Systems and Earnings Inequalities:Does Institutional Diversity Matter?," DULBEA Working Papers 13-06, ULB -- Universite Libre de Bruxelles.
    4. Olga Cant⊙, 2000. "Income Mobility In Spain: How Much Is There?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(1), pages 85-102, March.
    5. Lawrence F. Katz & Kevin M. Murphy, 1992. "Changes in Relative Wages, 1963–1987: Supply and Demand Factors," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 35-78.
    6. Tansel, Avsit, 2005. "Public-Private Employment Choice, Wage Differentials, and Gender in Turkey," Economic Development and Cultural Change, University of Chicago Press, vol. 53(2), pages 453-477, January.
    7. Riphahn, Regina T. & Schnitzlein, Daniel D., 2016. "Wage mobility in East and West Germany," Labour Economics, Elsevier, vol. 39(C), pages 11-34.
    8. Ana Cardoso & Shoshana Neuman & Adrian Ziderman, 2010. "Wage Mobility in Israel: The Effect of Sectoral Concentration," Journal of Labor Research, Springer, vol. 31(2), pages 146-161, June.
    9. Sologon, Denisa Maria & O'Donoghue, Cathal, 2009. "Equalizing or Disequalizing Lifetime Earnings Differentials? Earnings Mobility in the EU: 1994-2001," IZA Discussion Papers 4642, Institute of Labor Economics (IZA).
    10. Dickens, Richard, 2000. "Caught in a Trap? Wage Mobility in Great Britain: 1975-1994," Economica, London School of Economics and Political Science, vol. 67(268), pages 477-497, November.
    11. Aretz, Bodo, 2013. "Gender Differences in German Wage Mobility," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80003, Verein für Socialpolitik / German Economic Association.
    12. Daniele Checchi & Cecilia García‐Peñalosa, 2010. "Labour Market Institutions and the Personal Distribution of Income in the OECD," Economica, London School of Economics and Political Science, vol. 77(307), pages 413-450, July.
    13. Wolfgang Franz & Viktor Steiner, 2000. "Wages in the East German Transition Process: Facts and Explanations," German Economic Review, Verein für Socialpolitik, vol. 1(3), pages 241-269, August.
    14. Machin, Stephen, 1997. "The decline of labour market institutions and the rise in wage inequality in Britain," European Economic Review, Elsevier, vol. 41(3-5), pages 647-657, April.
    15. Dmitri Romanov & Noam Zussman, 2003. "Labor Income Mobility And Employment Mobility In Israel, 1993–96," Israel Economic Review, Bank of Israel, vol. 1(1), pages 81-102.
    16. Moshe Buchinsky & Jennifer Hunt, 1999. "Wage Mobility In The United States," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 351-368, August.
    17. Hofer, Helmut & Weber, Andrea, 2002. "Wage mobility in Austria 1986-1996," Labour Economics, Elsevier, vol. 9(4), pages 563-577, September.
    18. David Card, 2001. "The Effect of Unions on Wage Inequality in the U.S. Labor Market," ILR Review, Cornell University, ILR School, vol. 54(2), pages 296-315, January.
    19. Ronald Bachmann & Peggy Bechara & Sandra Schaffner, 2016. "Wage Inequality and Wage Mobility in Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(1), pages 181-197, March.
    20. Cowell, Frank, 2011. "Measuring Inequality," OUP Catalogue, Oxford University Press, edition 3, number 9780199594047, Decembrie.
    21. Aytekin Guven & Basak Dalgic & Aysit Tansel, 2014. "Can Income Mobility Reduce Income Inequality? Evidence From Turkey," Koç University-TUSIAD Economic Research Forum Working Papers 1415, Koc University-TUSIAD Economic Research Forum.
    22. Orhan Kara, 2006. "Occupational gender wage discrimination in Turkey," Journal of Economic Studies, Emerald Group Publishing, vol. 33(2), pages 130-143, May.
    23. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    24. Aytekin Güven & Basak Dalgic & Aysit Tansel, 2014. "Gelir Hareketliligi Esitsizlikleri Azaltabilir mi? Turkiye Ornegi," ERC Working Papers 1407, ERC - Economic Research Center, Middle East Technical University, revised Jul 2014.
    25. Thomas Raferzeder & Rudolf Winter-Ebmer, 2007. "Who is on the rise in Austria: Wage mobility and mobility risk," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(1), pages 39-51, April.
    26. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2011. "Trade, technology and skills: Evidence from Turkish microdata," Labour Economics, Elsevier, vol. 18(S1), pages 60-70.
    27. Fields, Gary S. & Ok, Efe A., 1996. "The Meaning and Measurement of Income Mobility," Journal of Economic Theory, Elsevier, vol. 71(2), pages 349-377, November.
    28. Bogliacino, Francesco & Vivarelli, Marco & Araújo, Bruno César, 2011. "Technology, trade and skills in Brazil: evidence from micro data," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    29. Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
    30. Gerhard Riener, 2012. "Inequality and mobility of household incomes in Europe: evidence from the ECHP," Applied Economics, Taylor & Francis Journals, vol. 44(3), pages 279-288, January.
    31. Ipek Ilkkaracan & Raziye Selim, 2007. "The Gender Wage Gap in the Turkish Labor Market," LABOUR, CEIS, vol. 21(3), pages 563-593, September.
    32. Ilina Srour & Erol Taymaz & Marco Vivarelli, 2014. "Globalization, Technology and Skills: Evidence from Turkish Longitudinal Microdata," ERC Working Papers 1405, ERC - Economic Research Center, Middle East Technical University, revised Jun 2014.
    33. Bruno Cesar Araújo & Francesco Bogliacino & Marco Vivarelli, 2011. "Technology, trade and skills in Brazil: Some evidence from microdata," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1171, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    34. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    35. repec:zbw:rwirep:0386 is not listed on IDEAS
    36. Daniele Checchi & Cecilia García-Peñalosa, 2008. "Labour market institutions and income inequality [‘Globalisation and the great U-turn: Income inequality trends in 16 OECD countries’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 23(56), pages 602-649.
    37. Bakis, Ozan & Polat, Sezgin, 2013. "Wage Inequality in Turkey: 2002-2010," GIAM Working Papers 13-9, Galatasaray University Economic Research Center.
    38. Gernandt, Johannes, 2009. "Decreasing wage mobility in Germany," ZEW Discussion Papers 09-044, ZEW - Leibniz Centre for European Economic Research.
    39. Gary Fields, 2010. "Does income mobility equalize longer-term incomes? New measures of an old concept," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 409-427, December.
    40. Fields, Gary S & Ok, Efe A, 1999. "Measuring Movement of Incomes," Economica, London School of Economics and Political Science, vol. 66(264), pages 455-471, November.
    41. Cardoso, Ana Rute, 2006. "Wage mobility: do institutions make a difference?," Labour Economics, Elsevier, vol. 13(3), pages 387-404, June.
    42. Wojciech Kopczuk & Emmanuel Saez & Jae Song, 2010. "Earnings Inequality and Mobility in the United States: Evidence from Social Security Data Since 1937," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 91-128.
    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. Selin Pelek, 2018. "The Impact of the Minimum Wage on Wage Distribution: The Evidence from Turkey," Ekonomi-tek - International Economics Journal, Turkish Economic Association, vol. 7(1), pages 17-59, January.
    2. Ashley Pullman & Britta Gauly & Clemens M. Lechner, 2021. "Short-term earnings mobility in the Canadian and German context: the role of cognitive skills," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-19, 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. Aysit Tansel & Başak Dalgıç & Aytekin Güven, 2019. "Wage Inequality and Wage Mobility in Turkey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(1), pages 107-129, February.
    2. Ronald Bachmann & Peggy Bechara & Sandra Schaffner, 2016. "Wage Inequality and Wage Mobility in Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(1), pages 181-197, March.
    3. Aretz, Bodo, 2013. "Gender Differences in German Wage Mobility," IZA Discussion Papers 7158, Institute of Labor Economics (IZA).
    4. Ronald Bachmann & Peggy Bechara & Sandra Schaffner, 2012. "Wage Inequality and Wage Mobility in Europe," Ruhr Economic Papers 0386, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. repec:zbw:rwirep:0386 is not listed on IDEAS
    6. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Coban, Mustafa, 2017. "Wage mobility, wage inequality, and tasks: Empirical evidence from Germany, 1984-2014," Discussion Paper Series 139, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    8. Riphahn, Regina T. & Schnitzlein, Daniel D., 2016. "Wage mobility in East and West Germany," Labour Economics, Elsevier, vol. 39(C), pages 11-34.
    9. Garnero, Andrea & Hijzen, Alexander & Martin, Sébastien, 2019. "More unequal, but more mobile? Earnings inequality and mobility in OECD countries," Labour Economics, Elsevier, vol. 56(C), pages 26-35.
    10. Aretz, Bodo & Gürtzgen, Nicole, 2012. "What explains the decline in wage mobility in the German low-wage sector?," ZEW Discussion Papers 12-041, ZEW - Leibniz Centre for European Economic Research.
    11. Thomas Demuynck & Dirk Van de gaer, 2012. "Inequality Adjusted Income Growth," Economica, London School of Economics and Political Science, vol. 79(316), pages 747-765, October.
    12. Michael Chletsos & Stelios Roupakias, 2020. "Education and wage inequality before and during the fiscal crisis: A quantile regression analysis for Greece 2006–2016," Review of Development Economics, Wiley Blackwell, vol. 24(4), pages 1333-1364, November.
    13. Bachmann, Ronald & Boockmann, Bernhard & Gonschor, Myrielle & Kalweit, René & Klauser, Roman & Laub, Natalie & Rulff, Christian & Vonnahme, Christina, 2022. "Auswirkungen des gesetzlichen Mindestlohns auf Löhne und Arbeitszeiten," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 264288.
    14. Mehtabul Azam, 2022. "Household income mobility in India, 1993–2011," Review of Development Economics, Wiley Blackwell, vol. 26(4), pages 1902-1943, November.
    15. Ashley Pullman & Britta Gauly & Clemens M. Lechner, 2021. "Short-term earnings mobility in the Canadian and German context: the role of cognitive skills," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-19, December.
    16. Bachmann, Ronald & Bonin, Holger & Boockmann, Bernhard & Demir, Gökay & Felder, Rahel & Isphording, Ingo & Kalweit, René & Laub, Natalie & Vonnahme, Christina & Zimpelmann, Christian, 2020. "Auswirkungen des gesetzlichen Mindestlohns auf Löhne und Arbeitszeiten: Studie im Auftrag der Mindestlohnkommission," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 222998.
    17. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute of Labor Economics (IZA).
    18. Bakis, Ozan & Polat, Sezgin, 2013. "Wage Inequality in Turkey: 2002-2010," GIAM Working Papers 13-9, Galatasaray University Economic Research Center.
    19. Battisti, Michele & Gatto, Massimo Del & Parmeter, Christopher F., 2022. "Skill-biased technical change and labor market inefficiency," Journal of Economic Dynamics and Control, Elsevier, vol. 139(C).
    20. Dang,Hai-Anh H. & Lokshin,Michael M. & Abanokova,Ksenia & Bussolo,Maurizio, 2018. "Inequality and Welfare Dynamics in the Russian Federation during 1994-2015," Policy Research Working Paper Series 8629, The World Bank.
    21. Magali Duque & Abigail McKnight, 2019. "Understanding the relationship between inequalities and poverty: a review of dynamic mechanisms," CASE Papers /217, Centre for Analysis of Social Exclusion, LSE.

    More about this item

    Keywords

    Wage Inequality; Wage Mobility; Heterogeneity; Turkey.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:met:wpaper:1414. 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: Erol Taymaz (email available below). General contact details of provider: https://edirc.repec.org/data/ermettr.html .

    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.