Economic and Econometric Evaluation of the Turkish Labor Market

Abstract

This dissertation is organized in three chapters that deal with issues on labor market changes in Turkey. The first chapter estimates how historical internal migration impacted the gender pay gap in the Turkish Labor Market regionally and occupationally. For this purpose I used Turkish Household Budget Survey data which are retrieved from Turkish Statistics Institute. Getting advantage of the nice future of the micro level data sets help to explain the changes from 2002 to 2013. I first explain the factors influencing regional gender pay differences in the Turkish Labor Market. Then, I apply the Oaxaca-Blinder decomposition method to estimate potential wage gap between genders. The chapter also uses the Propensity Score Matching method to analyze regional and occupational differences over the 12 years period. The results present a clear wage gap between genders in favor of female labors. In addition to this, the regional gender wage gap is higher in rural are than urban areas due to the thinner laborers market in rural areas. The results revel that unskilled workers in agriculture, stockbreeding, fisheries and forestry areas had the highest pay gap in each year during the study period. The second chapter investigates a specific policy that was proposed to increase labor force participation in all females and young males who are between 18 to 29 years old. The policy was implemented in July 2008 giving insurance incentive to employers who hired additional female workers and young male workers after the date. The policy provided a 100% insurance incentive for 5 years with a decreasing rate for the following years. The Income and Living Conditions surveys for 2006 and 2011 provided information about labor force participation before and after policy implementation. To analyze the policy impact, I applied a nonlinear difference in difference model using the micro level data sets. The findings reveal that the policy had different impacts depending on the region of Turkey. After the policy was applied, the highest labor force participation was in East Marmara, while 6 of the 12 regions of Turkey had no statistically significant impact. This chapter was published at http://ijmas.com/CurrentIssueDetails.aspx?ID=4020. The third chapter provides information about the decision mechanism of individuals in the Turkish Labor market. In other words, it estimates laborers' employment choices among not working, working in the public sector, private sector, and others. For estimation, I estimated Mincer’s wage equation with appropriate correction for selectivity bias using Heckman on 2011 Household Budget survey results. Then, the individuals' sectoral choice was estimated by a multinomial logit model. The finding reveals that the wage gap in the public sectors is less than other sectors. Also, the majority of individuals were employed in the public sectors. Both females and males prefer public sector compared to private and other sectors. Higher educational attainment may decrease the disparity between the public and private sectors for both genders. Therefore, policy makers should focus on increasing educational attainment and working condition toward equal payment instead of increasing the wage bill of public sectors. This chapter was published at http://www.jiarm.com/APR2017/paper30352.pdf