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Impact of Minimum Wages on Exporters: Evidence From a Sharp Minimum Wage Increase in Turkey

Author

Listed:
  • Yusuf Emre Akgunduz
  • Altan Aldan
  • Yusuf Kenan Bagir
  • Huzeyfe Torun

Abstract

The minimum wages in Turkey rose by nearly 30% in January 2016. We investigate the impact of the increase in minimum wages on export value and prices of firms. We use administrative employee-employer matched firm and transaction level customs data for the analysis. We calculate the potential exposure of each firm to the minimum wage increase according to their 2015 employment records and estimate the effects using a difference-in-differences approach. The results show that there is no significant effect on export prices suggesting that Turkish exporters are price-takers in international trade and producer costs have little effect on export prices in the short run. The impact on export amount is varying across firms depending on the firm size.

Suggested Citation

  • Yusuf Emre Akgunduz & Altan Aldan & Yusuf Kenan Bagir & Huzeyfe Torun, 2019. "Impact of Minimum Wages on Exporters: Evidence From a Sharp Minimum Wage Increase in Turkey," Working Papers 1920, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    • Handle: RePEc:tcb:wpaper:1920
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    File URL: https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Publications/Research/Working+Paperss/2019/19-20
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    Cited by:

    1. Abdullah Selim Öztek, 2021. "Minimum Wage Effects under Informality: Evidence from Turkey," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 35(2), pages 98-136.

    More about this item

    Keywords

    Minimum wages; Labor costs; Exports;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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