Exploring different measures of wage flexibility in a developing economy context: The case for Turkey
AbstractIn this paper we use Turkish household labor force data to address a number of conceptual issues pertaining to the wage curve, an empirically derived negative relationship between the real wage level and the local unemployment rate. First, we estimate the wage curve using various definitions of the unemployment rate including discouraged and marginally attached workers, or the long-term unemployment rate to explore the most relevant measure of local labor market tension in the wage setting process. We find that broader definitions of unemployment provide a more effective reference point in measuring wage flexibility for women, whose attachment to the labor market is substantially weak in the Turkish context; while in the case of men, long-term unemployment rate yields the highest elasticity. Second, we show that particularly in the case of developing economies where labor markets are segmented by skill level, local unemployment rate disaggregated by education provide more accurate measures of the degree of group-specific wage competition. Finally, using quantile regression we show that wage responsiveness to unemployment can not be assumed to be constant along the wage distribution. In the Turkish case, we find a higher unemployment elasticity of wages around the median segment of wage distribution.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Galatasaray University Economic Research Center in its series GIAM Working Papers with number 12-2.
Length: 17 pages
Date of creation: 03 May 2012
Date of revision:
Wage curve; unemployment measurements; quantile regression; discouraged workers;
Other versions of this item:
- 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.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-08 (All new papers)
- NEP-ARA-2012-05-08 (MENA - Middle East & North Africa)
- NEP-LAB-2012-05-08 (Labour Economics)
- NEP-LMA-2012-05-08 (Labor Markets - Supply, Demand, & Wages)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andrea Brandolini & Piero Cipollone & Eliana Viviano, 2006.
"Does The Ilo Definition Capture All Unemployment?,"
Journal of the European Economic Association,
MIT Press, vol. 4(1), pages 153-179, 03.
- Francesco Devicienti & Agata Maida & Lia Pacelli, 2006.
"The Resurrection of the Italian Wage Curve,"
LABORatorio R. Revelli Working Papers Series
52, LABORatorio R. Revelli, Centre for Employment Studies.
- Devicenti francesco & Maida Agata & Pacelli Lia, 2005. "The Resurrection of the Italian Wage Curve," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200502, University of Turin.
- Baltagi, Badi H. & Baskaya, Yusuf Soner & Hulagu, Timur, 2011.
"The Turkish Wage Curve: Evidence from the Household Labor Force Survey,"
IZA Discussion Papers
5633, Institute for the Study of Labor (IZA).
- 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.
- Badi H. Baltagi & Yusuf Soner Baskaya & Timur Hulagu, 2011. "The Turkish Wage Curve: Evidence from the Household Labor Force Survey," Center for Policy Research Working Papers 134, Center for Policy Research, Maxwell School, Syracuse University.
- Badi H. Baltagi & Yusuf Soner Baskaya & Timur Hulagu, 2011. "The Turkish Wage Curve : Evidence from the Household Labor Force Survey (Türkiye’de Ücret Egrisi: Hanehalki Isgücü Anketi’nden Bulgular)," Working Papers 1106, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
- Carlsen, Fredrik & Johansen, Kare, 2005. "Regional wages and subjective measures of employment opportunities," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 34(3), pages 377-400, May.
- 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.
- 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.
- Stephen R. G. Jones & W. Craig Riddell, 1999.
"The Measurement of Unemployment: An Empirical Approach,"
Econometric Society, vol. 67(1), pages 147-162, January.
- Stephen R. G. Jones & W. Craig Riddell, . "The Measurement Of Unemployment: An Empirical Approach," Canadian International Labour Network Working Papers 09, McMaster University.
- Garrido, Luis & Toharia, Luis, 2004. "What does it take to be (counted as) unemployed? The case of Spain," Labour Economics, Elsevier, vol. 11(4), pages 507-523, August.
- Michele Pellizzari, 2004.
"Do Friends and Relatives Really Help in Getting a Good Job?,"
CEP Discussion Papers
dp0623, Centre for Economic Performance, LSE.
- Michele Pellizzari, 2010. "Do Friends and Relatives Really Help in Getting a Good Job?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 63(3), pages 494-510, April.
- Michele Pellizzari, 2004. "Do friends and relatives really help in getting a good job?," LSE Research Online Documents on Economics 19980, London School of Economics and Political Science, LSE Library.
- 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.
- Sanz-de-Galdeano, Anna & Turunen, Jarkko, 2006. "The euro area wage curve," Economics Letters, Elsevier, vol. 92(1), pages 93-98, July.
- Andreas Ammermuller & Claudio Lucifora & Federica Origo & Thomas Zwick, 2010. "Wage Flexibility in Regional Labour Markets: Evidence from Italy and Germany," Regional Studies, Taylor & Francis Journals, vol. 44(4), pages 401-421.
- Pannenberg, Markus & Schwarze, Johannes, 1998. "Labor market slack and the wage curve," Economics Letters, Elsevier, vol. 58(3), pages 351-354, March.
- Matthew Gray & Alexandra Heath & Boyd Hunter, 2005. "The Labour Force Dynamics Of The Marginally Attached ," Australian Economic Papers, Wiley Blackwell, vol. 44(1), pages 1-14, 03.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Renginar Senses Dayangac).
If references are entirely missing, you can add them using this form.