THE IMPACT OF SOCIAL POLICY ON FEMALE LABOR SUPPLY IN TURKEY

Date

2023-8

Author

Tuç, Sine

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Female labor supply is important for economic development, productivity, and gender equality. Governments and intergovernmental agencies have recently given great importance to this subject and made many economic and social policy suggestions to increase the female labor supply. Most of the existing empirical studies about measuring the effect of such policies on the decision of individuals are based on static econometric estimation methods and ex-post analysis. However, making an ex-ante analysis is very important to estimate and evaluate the impact of any policy. Microsimulation is a method that can be effectively used for ex-ante analysis. This study uses a static microsimulation model to evaluate the impact of specific social and tax policies on the female labor supply in Turkey. This is the first study that estimates the participation and hour elasticities from the “Structural Discrete Choice Labor Supply Model” and uses the estimated elasticities for policy simulations in Turkey. Three sets of policies are examined: The reduction of VAT on some goods & services, wage subsidies for females, and early childhood education subsidies for females with 3-6 years old children. Estimations and microsimulations are based on HBS micro-level data for the 2013-2019 period. A wage equation is estimated with Heckman’s Two Step estimation procedure. Using the estimated wage rates, a Structural Discrete Choice Model is estimated by considering observed and unobserved heterogeneities in the utility function. It is found that some of the policies analyzed in this study lead to a significant increase in female employment and female wage income.

Subject Keywords

Social Policy Impact Analysis, Discrete Choice Labor Supply, Female Labor Supply, Microsimulation

URI

https://hdl.handle.net/11511/104872

Collections

Graduate School of Social Sciences, Thesis