Abstract
This paper examines the Turkish wage curve using individual data from the Household Labor Force Survey including 26 NUTS-2 regions over the period 2005–2008. We find an unemployment elasticity of − 0.099 , with a higher elasticity for younger, less educated, less experienced and female workers.
Highlights
The relationship between real wages and unemployment rates has long been studied in economics
There may be less need for ...rms to pay e¢ ciency wages to their workers as the outside options of workers would decrease with higher unemployment rates
Using a rich individual level data set from the Household Labor Force Survey in Turkey, we show that the unemployment elasticity of hourly real wages in Turkey is in line with the international evidence
Summary
The relationship between real wages and unemployment rates has long been studied in economics. The Turkish wage curve has been analyzed by Ilkkaracan and Selim (2003), who used unemployment variations across 7 geographic regions in Turkey in 1994 They provide evidence for the existence of a wage curve for most types of workers. Our paper estimates a wage curve for Turkey using micro-level wage data, namely the TURKSTAT Household Labor Force Survey (HLFS), over the period 2005 - 2008 This rich individual level data set allows us to control for a large set of individual characteristics a¤ecting individuals’wage responses to variations in regional unemployment rates. An important ...nding is that the hourly wages of females in Turkey are much more sensitive to regional unemployment rates than their male counterpart This e¤ect is especially evident for younger, less-experienced and low-educated female wage-workers, whose number has been steadily increasing over the last two decades
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