Labor Mobility across the Formal/Informal Divide in Turkey: Evidence from Individual Level Data
Informality has long been a salient phenomenon in developing country labor markets, thus has been addressed in several theoretical and empirical research. Turkey, given its economic and demographic dynamics, provides rich evidence for a growing, heterogeneous and multifaceted informal labor market. However, the existing evidence on labor informality in Turkey is mixed and scant. Along these lines, we aim to extend the existing literature by providing a diagnosis of dynamic worker flows across distinct labor market states and identifying the effects of certain individual and job characteristics on variant mobility patterns. More specifically, we first develop and discuss a set of probability statistics based on annual worker transitions across distinct employment states utilizing Markov transition processes. As Bosch and Maloney (2007:3) argue: “labor status mobility can be assumed as a process in which changes in the states occur randomly through time, and probabilities of moves between particular states are governed by Markov transition matrices”. Towards this end, we will use the novel Income and Living Conditions Survey (SILC) panel data set to compute the transition probabilities of individuals moving across the labor market states of formal-salaried, informal-salaried, formal self-employed, informal self-employed, unemployed and inactive. The transitions analysis is conducted separately for two, three and four year panels pertaining to 2006 to 2007, 2006 to 2008 and 2006 to 2009 transitions; for total, male and female samples; and lastly for total and non-agricultural samples. In this way, we aim to contribute to the limited body of stylized facts available on mobility and informality in the Turkish labor market. Next, we conduct multinomial logit regressions individually for each set of panel to identify the impact of individual characteristics (i.e. gender, age, education level, work experience, sector of economic activity, firm size, number of other household members, having/not having children, rural/urban) underlying worker transitions. The results reveal several relationships between the covariates and likelihood of variant transitions, and are of remarkable importance for designing policy to address labor informality and reduce its negative externalities.
|Date of creation:||Jan 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://erf.ku.edu.tr
More information through EDIRC
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.:
- Bosch, Mariano & Maloney, William F., 2007.
"Comparative Analysis of Labor Market Dynamics Using Markov Processes: An Application to Informality,"
IZA Discussion Papers
3038, Institute for the Study of Labor (IZA).
- Bosch, Mariano & Maloney, William F., 2010. "Comparative analysis of labor market dynamics using Markov processes: An application to informality," Labour Economics, Elsevier, vol. 17(4), pages 621-631, August.
- Bosch, Mariano & Maloney, William, 2007. "Comparative analysis of labor market dynamics using markov processes : an application to informality," Policy Research Working Paper Series 4429, The World Bank.
- Bosch, Mariano & Maloney, William F., 2007. "Gross Worker Flows in the Presence of Informal Labor Markets: Evidence from Mexico, 1987-2002," IZA Discussion Papers 2864, Institute for the Study of Labor (IZA).
- Silke Woltermann, 2002. "Job-Search Methods and Labor Market Transitions in a Segmented Economy - Some Empirical Evidence From Brazil," Ibero America Institute for Econ. Research (IAI) Discussion Papers 088, Ibero-America Institute for Economic Research.
- Marcouiller, Douglas & Ruiz de Castilla, Veronica & Woodruff, Christopher, 1997.
"Formal Measures of the Informal-Sector Wage Gap in Mexico, El Salvador, and Peru,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 45(2), pages 367-92, January.
- Douglas Marcouiller, S.J. & Veronica Ruiz de Castilla & Christopher Woodruff, 1995. "Formal Measures of the Informal Sector Wage Gap in Mexico, El Salvador, and Peru," Boston College Working Papers in Economics 294., Boston College Department of Economics.
- Krstic, Gorana & Sanfey, Peter, 2007.
"Mobility, poverty and well-being among the informally employed in Bosnia and Herzegovina,"
Elsevier, vol. 31(3), pages 311-335, September.
- Gorana Krstic & Peter Sanfey, 2007. "Mobility, poverty and well-being among the informally employed in Bosnia and Herzegovina," Working Papers 101, European Bank for Reconstruction and Development, Office of the Chief Economist.
- Hartmut Lehmann & Norberto Pignatti, 2008.
"Informal Employment Relationships and Labor Market Segmentation in Transition Economies: Evidence from Ukraine,"
ESCIRRU Working Papers
3, DIW Berlin, German Institute for Economic Research.
- Lehmann, Hartmut & Pignatti, Norberto, 2007. "Informal Employment Relationships and Labor Market Segmentation in Transition Economies: Evidence from Ukraine," IZA Discussion Papers 3269, Institute for the Study of Labor (IZA).
- Carmen Pagés-Serra & Marco Stampini, 2007.
"No Education, No Good Jobs? Evidence on the Relationship between Education and Labor Market Segmentation,"
Research Department Publications
4561, Inter-American Development Bank, Research Department.
- Pagés, Carmen & Stampini, Marco, 2009. "No education, no good jobs? Evidence on the relationship between education and labor market segmentation," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 387-401, September.
- Pagés, Carmen & Stampini, Marco, 2007. "No Education, No Good Jobs? Evidence on the Relationship between Education and Labor Market Segmentation," IZA Discussion Papers 3187, Institute for the Study of Labor (IZA).
- Carmen Pagés-Serra & Marco Stampini, 2007. "No Education, No Good Jobs?: Evidence on the Relationship Between Education and Labor Market Segmentation," IDB Publications (Working Papers) 4121, Inter-American Development Bank.
- Gong, Xiaodong & Van Soest, Arthur & Villagomez, Elizabeth, 2004.
"Mobility in the Urban Labor Market: A Panel Data Analysis for Mexico,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 53(1), pages 1-36, October.
- Gong, X. & van Soest, A.H.O. & Villagomez, E., 2000. "Mobility in the Urban Labor Market : A Panel Data Analysis for Mexico," Discussion Paper 2000-46, Tilburg University, Center for Economic Research.
- Gong, Xiaodong & van Soest, Arthur & Villagomez, Elizabeth, 2000. "Mobility in the Urban Labor Market: A Panel Data Analysis for Mexico," IZA Discussion Papers 213, Institute for the Study of Labor (IZA).
- Bigsten, Arne & Mengistae, Taye & Shimeles, Abebe, 2007. "Mobility and earnings in Ethiopia's urban labor markets, 1994-2004," Policy Research Working Paper Series 4168, The World Bank.
- Aysit Tansel, 1999. "Formal Versus Informal Sector Choice of Wage Earners and their Wages in Turkey," Working Papers 9927, Economic Research Forum, revised Sep 1999.
- Tuncer Bulutay & Enver Taþtý, 2004. "Informal Sector in the Turkish Labour Market," Working Papers 2004/22, Turkish Economic Association.
- Maloney, William, 2003.
Policy Research Working Paper Series
2965, The World Bank.
- Sabine Bernab? & Marco Stampini, 2008. "Labour mobility during transition: evidence from Georgia," LICOS Discussion Papers 20608, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- Mazumdar, Dipak, 1976. "The urban informal sector," World Development, Elsevier, vol. 4(8), pages 655-679, August.
- Funkhouser, Edward, 1996. "The urban informal sector in Central America: Household survey evidence," World Development, Elsevier, vol. 24(11), pages 1737-1751, November.
- Bosch, Mariano & Maloney, William, 2005. "Labor market dynamics in developing countries: comparative analysis using continuous time Markov processes," Policy Research Working Paper Series 3583, The World Bank.
- Huitfeldt, H., 1998. "Unemployment and Labour Market Transitions in the Czech Republic: Evidence from Micro-Data," Papers 1998-5, Uppsala - Working Paper Series.
- Canavire-Bacarrezao, Gustavo Javier & Urna Soria , Luís Fernando, 2009.
"Unemployment Duration and Labor Mobility in Argentina: a Socioeconomic-based pre- and post-crisis Analysis,"
Revista Latinoamericana de Desarrollo Economico,
Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana, issue 12, pages 169-217, Octubre.
- Gustavo Javier Canavire-Bacarreza & Luís Fernando Lima Soria, 2007. "Unemployment Duration and Labor Mobility in Argentina: A Socioeconomic-Based Pre- and Post-Crisis Analysis," CEDLAS, Working Papers 0054, CEDLAS, Universidad Nacional de La Plata.
- Maciej Bukowski & Piotr Lewandowski, 2005. "Transitions from unemployment in Poland: a multinomial logit analysis," Labor and Demography 0511008, EconWPA, revised 07 Dec 2005.
- Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," World Bank Economic Review, World Bank Group, vol. 13(2), pages 275-302, May.
- Telles, Edward E, 1993. "Urban Labor Market Segmentation and Income in Brazil," Economic Development and Cultural Change, University of Chicago Press, vol. 41(2), pages 231-49, January.
- Sabine Bernabe, 2002. "Informal Employment in Countries in Transition: A conceptual framework," CASE Papers case56, Centre for Analysis of Social Exclusion, LSE.
- Angel Calderon Madrid, 2000. "Job Stability and Labor Mobility in Urban Mexico: A Study Based on Duration Models and Transition Analysis," Research Department Publications 3117, Inter-American Development Bank, Research Department.
- Galli, Rossana & Kucera, David, 2004. "Labor Standards and Informal Employment in Latin America," World Development, Elsevier, vol. 32(5), pages 809-828, May.
- Sabine Bernabè & Marco Stampini, 2009. "Labour mobility during transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(2), pages 377-409, 04.
- Aysit Tansel, 2001. "Wage Earners, Self Employed and Gender in the Informal Sector in Turkey," Working Papers 0102, Economic Research Forum, revised Jan 2001.
- Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, vol. 2(2), pages 165-187, June.
- Martha Alter Chen, 2007. "Rethinking the Informal Economy: Linkages with the Formal Economy and the Formal Regulatory Environment," Working Papers 46, United Nations, Department of Economics and Social Affairs.
- Enrico Fabrizi, 2009. "The Determinants of Labour Market Transitions," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 68(2), pages 233-265, July.
- Derek Yu, 2010. "Defining and measuring informal employment in South Africa: A review of recent approaches," Working Papers 09/2010, Stellenbosch University, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:koc:wpaper:1201. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sumru Oz)
If references are entirely missing, you can add them using this form.