The Turkish Wage Curve: Evidence from the Household Labor Force Survey

10 Pages Posted: 18 Apr 2011

See all articles by Badi H. Baltagi

Badi H. Baltagi

Syracuse University; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics; Syracuse University - Maxwell School of Citizenship and Public Affairs

Yusuf Soner Baskaya

University of Glasgow

Timur Hülagü

Central Bank of Turkey

Abstract

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.

Keywords: wage curve, fixed effects, instrumental variables, two-stage least squares

JEL Classification: C26, J30, J60

Suggested Citation

Baltagi, Badi H. and Soner Baskaya, Yusuf and Hulagu, Timur, The Turkish Wage Curve: Evidence from the Household Labor Force Survey. IZA Discussion Paper No. 5633, Available at SSRN: https://ssrn.com/abstract=1812478 or http://dx.doi.org/10.2139/ssrn.1812478

Badi H. Baltagi (Contact Author)

Syracuse University ( email )

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HOME PAGE: http://https://pbaltagi.wix.com/badibaltagi

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

Syracuse University - Maxwell School of Citizenship and Public Affairs ( email )

400 Eggers Hall
Syracuse, NY 13244
United States

Yusuf Soner Baskaya

University of Glasgow ( email )

Timur Hulagu

Central Bank of Turkey ( email )

Ankara, Ankara 06050
Turkey

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