Targeting Women’s Employment: Do Employment Subsidies Work? Evidence from Turkey

Abstract

This paper examines the effect of the 2008 employment package on the gender employment gap in Turkey. The package introduced subsidies for the employment of women in all 81 provinces. However, positive discrimination was only effective in the provinces that did not benefit from social security contribution cuts under a previous subsidy scheme. Using a difference-in-differences analysis, I find that those provinces saw a 5.1 percent higher increase in the female share of employment in comparison with provinces where positive discrimination was not in force. Moreover, the effectiveness of the package is not lower in more conservative provinces, where conservatism is measured by the percentage of early marriages, gender inequality, and gender empowerment indices. The study concludes that the 2008 employment package was successful in closing the gender gap, even in more conservative provinces. By showing that a demand-side intervention can overcome the cultural constraints, it offers valuable insights to policy-makers interested in pursuing policies related to disadvantaged groups, particularly women. JEL Classification: C31, J08, J21, Z10