Wage Inequality and Wage Mobility in Turkey

54 Pages Posted: 6 Nov 2014

See all articles by Aysit Tansel

Aysit Tansel

Middle East Technical University (METU) - Department of Economics; IZA Institute of Labor Economics; Economic Research Forum (ERF)

Basak Dalgic

Hacettepe University

Aytekin Guven

Abant Izzet Baysal University

Multiple version iconThere are 2 versions of this paper

Date Written: November 5, 2014

Abstract

This paper investigates wage inequality and wage mobility in Turkey using the Surveys on Income and Living Conditions (SILC). This is the first paper that explores wage mobility for Turkey. It differs from the existing literature by providing analyses of wage inequality and wage mobility over various socioeconomic groups such as gender, age, education and sector of economic activity. We first present an overview of the evolution of wages and wage inequality over the period 2005-2011. Next, we compute several measures of wage mobility and explore the link between wage inequality and wage mobility. Further, we compute the transition matrices which show movements of individuals across the wage distribution from one period to another and investigate the determinants of transition probabilities using a multinomial logit model. The results show that overall the real wages increased over the study period and wage inequality exhibits a slight increase. Wage inequality is one of the highest among the European Union (EU) countries. The wage mobility in Turkey is lower than what is observed in the European Union countries although it increases as time horizon expands. Wage mobility has an equalizing impact on the wage distribution, however; this impact is not substantial enough to overcome the high and persistent wage inequality in Turkey.

Keywords: Wage Inequality, Wage Mobility, Heterogeneity, Turkey

JEL Classification: D31, D63, J31, J60

Suggested Citation

Tansel, Aysit and Dalgic, Basak and Guven, Aytekin, Wage Inequality and Wage Mobility in Turkey (November 5, 2014). Available at SSRN: https://ssrn.com/abstract=2519502 or http://dx.doi.org/10.2139/ssrn.2519502

Aysit Tansel (Contact Author)

Middle East Technical University (METU) - Department of Economics ( email )

Inonu Bulvari
Ankara 06800
Turkey
90 312 210 2073 (Phone)
90 312 210 7964 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Economic Research Forum (ERF) ( email )

21 Al-Sad Al-Aaly St.
(P.O. Box: 12311)
Dokki, Cairo
Egypt

Basak Dalgic

Hacettepe University ( email )

Ankara
Turkey

Aytekin Guven

Abant Izzet Baysal University ( email )

United States

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