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Wage Inequality in Turkey: 2002-2010

Author

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  • Bakis, Ozan

    () (Galatasaray University Economic Research Center)

  • Polat, Sezgin

    () (Galatasaray University Economic Research Center)

Abstract

This paper studies the evolution of wage inequality over the last decade in Turkey using household labor force survey between 2002 and 2010. During the period between 2002 and 2004, the relative supply of more educated workers to less educated workers stayed almost constant while their relative wages have decreased in the benefit of less educated workers. However, in the second period between 2004 and 2010 the relative supply of more educated workers to less educated workers had risen while their relative wages remained constant or kept increasing in the benefit of more educated workers. Both of these developments calls for factors other than those implied by a simple supply-demand model such as skill-biased technical change or minimum wage changes. The decomposition of wage inequality reveals that price(wage) e ect is dominant over the composition particularly in the period between 2002 and 2004. Our results show that the real minimum wage hike in 2004 corresponds to a major institutional change which proves to be welfare increasing in terms of wage inequality. The upper-tail (90/50) wage inequality decreased between 2002 and 2004 and stayed constant thereafter. The lower-tail (50/10) wage inequality decreased smoothly between 2002 and 2010. Our findings provide another evidence to the institutional view.

Suggested Citation

  • Bakis, Ozan & Polat, Sezgin, 2013. "Wage Inequality in Turkey: 2002-2010," GIAM Working Papers 13-9, Galatasaray University Economic Research Center.
  • Handle: RePEc:ris:giamwp:2013_009
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Polat, Sezgin, 2013. "Wage Compensation for Risk: The Case of Turkey," GIAM Working Papers 13-11, Galatasaray University Economic Research Center.
    2. Aysit Tansel & Basak Dalgic & Aytekin Güven, 2014. "Wage Inequality and Wage Mobility in Turkey," ERC Working Papers 1414, ERC - Economic Research Center, Middle East Technical University, revised Nov 2014.
    3. Ayça Akarçay Gürbüz & Sezgin Polat, 2016. "Public--private wage differentials in Turkey: public policy or market dynamics?," International Review of Applied Economics, Taylor & Francis Journals, vol. 30(3), pages 326-356, May.

    More about this item

    Keywords

    Wage inequality; Wage structure; Labor Demand; Decomposition; Turkey;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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