Intensive Margin and Extensive Margin Adjustments of Labor Market : Turkey versus United States
AbstractIn this paper, we document the intensive and extensive margin adjustments of labor market in Turkey and US.We find that both margins are important. More interestingly, the weight of intensive margin adjustment is substantially smaller than that of the extensive margin in both countries. This is robust to using various data sets and methods. Common wisdom and some theory would expect these countries to divert from each other significantly, because they represent two extreme points of labor market exibility with respect to OECD Employment Protection Index. A possible explanation for our empirical result is the sizable informal sector and self employment in Turkey as it might reduce the large hiring and firing costs and encourage firms towards extensive margin adjustment, and high hours per worker which might restrict the intensive margin adjustment, especially during booms.
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Bibliographic InfoPaper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 1339.
Date of creation: 2013
Date of revision:
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More information through EDIRC
intensive margin; extensive margin; labor market exibility; employment protection;
Other versions of this item:
- Temel Taskin, 2013. "Intensive margin and extensive margin adjustments of labor market: Turkey versus United States," Economics Bulletin, AccessEcon, vol. 33(3), pages 2307-2319.
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-18 (All new papers)
- NEP-ARA-2013-10-18 (MENA - Middle East & North Africa)
- NEP-IUE-2013-10-18 (Informal & Underground Economics)
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