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Labor mobility across the formal/informal divide in Turkey

Author

Listed:
  • Aysit Tansel
  • Elif Öznur Acar
Abstract
Purpose - This paper, the first one to use individual-level Turkish panel data, examines the labor market transitions in Turkey along the formal/informal employment divide. The purpose of this paper is to contribute to the limited body of empirical evidence available on mobility and informality in the Turkish labor market. Design/methodology/approach - Toward this end, the authors use Turkish income and Living Conditions Survey panel data for 2006, 2007, 2008 and 2009 to compute the Markov transition probabilities of individuals moving across six different labor market states: formal-salaried (FS), informal-salaried, formal self-employed, informal self-employed, unemployed and inactive. In order to examine the nature of mobility patterns in more detail, the authors then estimate six multinomial logit models individually for each transition adopting a number of individual and employment characteristics as explanatory variables. Findings - The authors find evidence that mobility patterns are fairly similar across different time spans, the probability of remaining in initial state is higher than the probability of transition into another state for all the labor market states, except for unemployment, there is only very limited mobility into the FS state. Gender, education and sector of economic activity are observed to display significant effects on mobility patterns. The results reveal several relationships between the covariates and likelihood of variant transitions. Research limitations/implications - This study provides a comprehensive and detailed diagnosis of the Turkish labor market. The market is observed to display a rather static structure throughout the period considered. The results indicate that a well recognition of underlying dynamics may help policy makers to produce various effective tools for addressing informality. Originality/value - First study to analyze labor market mobility across formal/informal sectors using newly available panel data.

Suggested Citation

  • Aysit Tansel & Elif Öznur Acar, 2017. "Labor mobility across the formal/informal divide in Turkey," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 44(4), pages 617-635, September.
  • Handle: RePEc:eme:jespps:jes-06-2015-0103
    DOI: 10.1108/JES-06-2015-0103
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    Citations

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    Cited by:

    1. Aksu, Ege & Erzan, Refik & Kırdar, Murat Güray, 2022. "The impact of mass migration of Syrians on the Turkish labor market," Labour Economics, Elsevier, vol. 76(C).
    2. Suzuki, Ken & Paul, Saumik & Maru, Takeshi & Kusadokoro, Motoi, 2019. "An Empirical Analysis of the Effects of Syrian Refugees on the Turkish Labor Market," ADBI Working Papers 935, Asian Development Bank Institute.
    3. Oksana Nezhyvenko, 2018. "Informal Employment in Ukraine and European Union Transition Countries," Erudite Ph.D Dissertations, Erudite, number ph18-03 edited by Philippe Adair.
    4. Duman, Anil, 2020. "Pay Gaps and Mobility for Lower and Upper Tier Informal Sector Employees: an investigation of the Turkish labor market," GLO Discussion Paper Series 655, Global Labor Organization (GLO).

    More about this item

    Keywords

    Multinomial logit; Informality; Mobility; Turkey; Europe and Central Asia; Labour market dynamics; Markov transition analysis; J21; J24; J40; J63; O17;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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