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The Turkish Wage Curve : Evidence from the Household Labor Force Survey (Türkiye’de Ücret Egrisi: Hanehalki Isgücü Anketi’nden Bulgular)

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  • Badi H. Baltagi
  • Yusuf Soner Baskaya
  • Timur Hulagu

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 Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 1106.

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Date of creation: 2011
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Handle: RePEc:tcb:wpaper:1106

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Keywords: Wage Curve; Fixed Effects; Regional Labor Markets; Two-Stage Least Squares;

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  1. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 026202375x, December.
  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. David G. Blanchflower & Andrew Oswald, 1995. "International Wage Curves," NBER Chapters, National Bureau of Economic Research, Inc, in: Differences and Changes in Wage Structures, pages 145-174 National Bureau of Economic Research, Inc.
  4. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
  5. Ozlem Onaran, 2002. "Measuring wage flexibility: the case of Turkey before and after structural adjustment," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 34(6), pages 767-781.
  6. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, American Economic Association, vol. 74(3), pages 433-44, June.
  7. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 70, pages 538.
  8. 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, Taylor & Francis Journals, vol. 35(14), pages 1589-1598.
  9. Baltagi, Badi H. & Blien, Uwe, 1998. "The German wage curve: evidence from the IAB employment sample," Economics Letters, Elsevier, Elsevier, vol. 61(2), pages 135-142, November.
  10. David Card, 1995. "The Wage Curve: A Review," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 722, Princeton University, Department of Economics, Industrial Relations Section..
  11. David G. Blanchflower & Andrew J. Oswald, 1995. "An Introduction to the Wage Curve," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 9(3), pages 153-167, Summer.
  12. Blanchflower, David G & Oswald, Andrew J, 1994. "Estimating a Wage Curve for Britain: 1973-90," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 104(426), pages 1025-43, September.
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Cited by:
  1. Yusuf Soner Baskaya & Timur Hulagu, 2011. "Informal-Formal Worker Wage Gap in Turkey : Evidence From A Semi-Parametric Approach," Working Papers, Research and Monetary Policy Department, Central Bank of the Republic of Turkey 1115, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  2. 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).
  3. 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, Galatasaray University Economic Research Center 12-2, Galatasaray University Economic Research Center.
  4. Blien, Uwe & Messmann, Susanne & Trappmann, Mark, 2012. "Do reservation wages react to regional unemployment?," IAB Discussion Paper, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] 201222, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Konyalı, Gonca, 2012. "Wage Curve Evidence From Turkey’s 2007-2009 Income and Living Conditions Survey," Investigaciones Regionales, Asociación Española de Ciencia Regional, Asociación Española de Ciencia Regional, issue 24, pages 199-210.

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