Overview of Firm-Size and Gender Pay Gaps in Turkey: The Role of Informal Employment

Yıl 2013, Cilt: 2 Sayı: 3, 1 - 21, 01.09.2013

Gizem Akar Binnur Balkan Semih Tümen

Öz

This paper documents two new findings linking firm-size and gender pay gaps to informal employment using micro-level data from Turkey. First, we show that the firm-size wage gap, defined as larger firms paying higher wages to observationally equivalent workers, is greater for informal employment than formal employment. And, second, we find that the gender pay gap is constant across different firm-size categories for formal employment, while it is a decreasing function of firm size for informal employment. These two facts jointly suggest that the informality status of a job is a valuable source of information in understanding the underlying forces determining firm-size and gender wage gaps. We propose and discuss the relevance of alternative mechanisms that might be generating these facts.

Anahtar Kelimeler

Informal employment, wage differentials, firm size, gender discrimination, THLFS Turkish Household Labor Force Survey

Teşekkür

We thank Hakan Ercan, Ercan Uygur (the Editor), two anonymous referees, seminar participants at the Central Bank of the Republic of Turkey, and the participants in the BETAM/ World Bank Labor Market Network Meeting in Istanbul and the Turkish Economic Association Workshop on Economic Statistics in Ankara for their helpful comments and suggestions. The views expressed here are our own and do not necessarily reflect those of the Central Bank of the Republic of Turkey. All errors are ours.

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