METU Department of Economics Seminar Series (May 23rd)
MIDDLE EAST TECHNICAL UNIVERSITY
Department of Economics Seminar Series
"Declining Labor Market Informality in Turkey: Unregistered Employment and Wage Underreporting"
(Central Bank of the Republic of Turkey)
Date: May 23, 2022 (Monday)
Synchronous Online Seminar
Meeting ID: 962 6861 4522
This paper examines labor market informality in Turkey at two margins, unregistered employment and wage underreporting. We first document the stylized facts about unregistered employment and its change between 2004 and 2018. While doing this, we examine the heterogeneity in informality across regions, sectors, firm properties and worker characteristics. Second, we decompose the change in informal employment rate into its components using the Oaxaca-Blinder methodology. We find that workforce composition change in gender, age, education, occupation, and industries explains half of the decline in informal employment rate from 2004 to 2018. Finally, we analyze the wage underreporting behavior using data from surveys and administrative records. We show that there has been a wide gap between the wages earned and wages declared to Social Security Institution among registered employees. However, this discrepancy declines significantly in recent years.