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Labor force status and income disparity: Evidence from Turkey

  • Akarcay-Gurbuz, Ayca

    (Galatasaray University Economic Research Center)

  • Ulus, Mustafa

    (Galatasaray University Economic Research Center)

The nature of the informal sector is a much debated issue. Is working in the informal sector a choice or a constraint? What is the relation between informality and poverty? Theoretically, both are possible, and in this sense, the informal sector bears its own dualism (Fields, 1990, 2005). Consequently, the answer is an empirical issue. In this study, we aim at providing further information about the Turkish labor market using the 2003 and 2008 Household Budget Surveys(HBS) which allows combining income levels with labor force status. We compare income according to five labor force statuses: non-participant, unemployed, worker in the formal sector and worker in the informal sector (agricultural and non-agricultural), and relate findings to poverty. We investigate data to see whether observable heterogeneities in terms of income exist not only between the different statuses, but also within the informal sector.

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Paper provided by Galatasaray University Economic Research Center in its series GIAM Working Papers with number 11-5.

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Length: 17 pages
Date of creation: 07 Nov 2011
Date of revision:
Handle: RePEc:ris:giamwp:2011_005
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  1. David KUCERA & Leanne RONCOLATO, 2008. "Informal employment: Two contested policy issues," International Labour Review, International Labour Organization, vol. 147(4), pages 321-348, December.
  2. Betcherman, Gordon & Daysal, N. Meltem & Pagés, Carmen, 2010. "Do employment subsidies work? Evidence from regionally targeted subsidies in Turkey," Labour Economics, Elsevier, vol. 17(4), pages 710-722, August.
  3. Agénor, Pierre-Richard & Bayraktar, Nihal & El Aynaoui, Karim, 2008. "Roads out of poverty? Assessing the links between aid, public investment, growth, and poverty reduction," Journal of Development Economics, Elsevier, vol. 86(2), pages 277-295, June.
  4. Khamis, Melanie, 2009. "Is Informal Sector Work an Alternative to Workfare Benefits? The Case of Pre-Program Expansion and Economic Crisis," IZA Discussion Papers 4614, Institute for the Study of Labor (IZA).
  5. Johannes P. Jütting & Jante Parlevliet & Theodora Xenogiani, 2008. "Informal Employment Re-loaded," OECD Development Centre Working Papers 266, OECD Publishing.
  6. Günther, Isabel & Launov, Andrey, 2012. "Informal employment in developing countries," Journal of Development Economics, Elsevier, vol. 97(1), pages 88-98.
  7. Pratap, Sangeeta & Quintin, Erwan, 2006. "Are labor markets segmented in developing countries? A semiparametric approach," European Economic Review, Elsevier, vol. 50(7), pages 1817-1841, October.
  8. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
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