The Turkish Wage Curve: Evidence from the Household Labor Force Survey
Badi H. Baltagi
Syracuse University - Maxwell School of Citizenship and Public Affairs; Institute for the Study of Labor (IZA)
Yusuf Soner Baskaya
affiliation not provided to SSRN
Central Bank of Turkey
IZA Discussion Paper No. 5633
This paper examines the Turkish wage curve using individual data from the Household Labor Force Survey (HLFS) including 26 NUTS-2 regions over the period 2005-2008. When the local unemployment rate is treated as predetermined, there is evidence in favor of the wage curve only for younger and female workers. However, if the lagged unemployment rate is used as an instrument for current unemployment rate, we find an unemployment elasticity of -0.099. We also find a higher elasticity for younger, less educated, low experienced workers than for older, more educated and more experienced workers. Another important finding is that the wages of females in Turkey are significantly more responsive to local unemployment rates than their male counterparts.
Number of Pages in PDF File: 10
Keywords: wage curve, fixed effects, instrumental variables, two-stage least squares
JEL Classification: C26, J30, J60
Date posted: April 18, 2011
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