Discrimination against women in Turkish labor market: an analysis of gender wage gap with Blinder-Oaxaca and Juhn-Murphy-Pierce decomposition methods, 2004-2017 period

Abstract

Purpose - The average education level of female in the labor force is higher than the education level of their male counterparts in Turkey. Since education level is the most important factor in the determination of wages, the average wage of female employees is expected to be higher than that of male employees. However, the data shows the reverse. In this paper, the gender wage gap in the 2004-2017 period is analyzed to understand what portion of the wage gap is due to discrimination and what portion is due to human capital factors. The sample used in the econometric analysis is the Household Labor Force Survey microdata in the 2004-2017 period. Blinder-Oaxaca and Juhn- Murphy-Pierce Decomposition methods are applied, and the results show that the gender wage gap in favor of male employees in the said period cannot be explained by human capital differences, but by discrimination against women in the labor market. Methodology - First wage equation regressions are set to see whether there is a difference between the effects and significance of explanatory variables on wages of male employees and females. Then, Blinder Oaxaca and Juhn Murphy Pierce decomposition methods are applied to see whether the wage gap can be explained by human capital differences or not. Findings- Data shows that there is a gender wage gap in favor of men in Turkish labor market and a strong discrimination against women. As for 2004, considering the human capital endowments, on average, women would have earned 5.2% more than what male employees earn. However, data show that male employees earn 15.1% more than what female employees earn, which can be interpreted that female employees have a wage-loss of about 20.3% due to discrimination. Both the wage gap and discrimination effects vary between regions. Most industrialized/developed and regions with high agriculture share in employment are usually the ones with larger gap and higher degree of discrimination. The wage gap and discrimination effects have declined until 2010, but they increased after that. Conclusion- Gender wage gap and discrimination based loss in wages are seem to be persistent so far in Turkish labor market, but as the average level of female employees increase the gap is expected to decline in long run.