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Informal sector wage gap in Turkey
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Date
2011
Author
Tuç Mis, Sine
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Informality has been a widespread fact in most of developing countries. Especially after the implementation of liberalization policies in the 1980s, informal sector has expanded, and informal employment has been more attractive in the Turkish economy. The aim of this thesis is to examine whether there is wage gap between formal and informal employment in Turkey for the years 2007 and 2008. In order to test if the determinants of wages are different, selection corrected wage equations are estimated for manufacturing and service sectors for men and women separately by using the Household Labor Force Survey micro level data of TURKSTAT. We also estimated Multinomial Logit model in order to be able to take the sector selection process into account. According to our estimation results, there was a significant wage gap between formal and informal employment in Turkey for the years 2007 and 2008, even after controlling for a number of individual-specific characteristics. This indicates the existence of the segmented labor market in terms of wages in Turkey, as it is asserted by the number of researchers arguing against the neo-classical labor market theory.
Subject Keywords
Informal sector (Economics)
URI
http://etd.lib.metu.edu.tr/upload/12613741/index.pdf
https://hdl.handle.net/11511/20896
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Graduate School of Social Sciences, Thesis
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S. Tuç Mis, “Informal sector wage gap in Turkey,” M.S. - Master of Science, Middle East Technical University, 2011.
