DETERMINANTS OF FORMAL AND INFORMAL SECTOR EMPLOYMENT IN THE URBAN AREAS OF TURKEY

Abstract

By applying a multinomial logit model and economic theory to household budget survey data, this study examines the determinants of formal and informal sector employment in the urban areas of Turkey. The analysis is carried out for men and women separately. The findings show that determinants of formal and informal employment in Turkey`s urban labor market vary by gender. Special emphasis is placed on the importance of sex (being male rather than female), marital status, household-headship and education variables, of which the first three presents the disadvantaged position of women in the labor market. Most women work in the informal sector despite significant improvements in their education attainment. Overall results confirm that the urban labor market is heterogeneous and reveal how labor supply factors are valued in the labor market. They also indicate the existence of sex discrimination in the labor market

Keywords

• Formal employment, Informal employment, Sector choice determinants, Turkey, Multinomial Logistic Regression

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