Sectoral Employment and Labor Costs: Elasticity Evidence on Turkey

Öz

A recurrent theme in employment policies is that reduction of labor costs would increase employment. This study aims to obtain a value for the employment elasticity of labor cost in Turkey through estimation of a sectoral employment equation. Using 3-digit ISIC Rev 3 industry data obtained from TURKSTAT, the present study performs a panel analysis. The calculated elasticities are positive, contradicting theoretical expectation., and pointing that cost reduction may not be a valid tool for employment expansion. It is also argued that the problem with the sign may be due to the data used and may actually be supportive of a wage curve.

Anahtar Kelimeler

• Labor cost, employment, panel analysis

Kaynakça

1. ADAMS, J. D. (1985). “Permanent Differences in Unemployment and Permanent Wage Differentials” Quarterly Journal of Economics 105:255-284.
2. BALTAGİ, B. H. (1995). Econometric Analysis of Panel Data, John Wiley and Sons LTD.: West Sussex, England.
3. BEHMAN S. (1978). “Interstate Differentials in Wages and Unemployment” Industrial Relations 17: 168-188.
4. BHALOTRA, S. R. (1998). “The Puzzle of Jobless Growth in Indian Manufacturing” Oxford Bulletin of Economics and Statistics, 60(1),
5. BHANDARİ, A. K. AND A. HESHMATİ. (2005). “Labor Use and Its Adjustment in Indian Manufacturing Industries” Institute for the Study of Labor Discussion Paper Series, Discussion Paper No: 1596.
6. BLANCHFLOWER, D. G. AND A. J. OSWALD. (1994). The Wage Curve, MIT Press: Cambridge, Massachusetts.
7. BLANCHFLOWER, D. G. AND A. J. OSWALD (2005) “The Wage Curve Reloaded”, NBER Working Paper 11338.
8. BOWLES, S. AND R. BOYER. (1995). “Wages, Aggregate Demand and Employment in An Open Economy: An Empirical Investigation” in Epstein, Gerald A. and Herbert M. Gintis (eds.) Macroeconomic Policy After the Conservative Era: Studies in Investment, Saving and Finance, Cambridge University Press.

9. FAJNZYLBER, P. AND W. F. MALONEY. (2000). “Labor Demand and Trade Reform in Latin America”, The World Bank Policy Research Working Paper Series No: 2491.
10. GÜRSEL,S., H. LEVENT, E. TAŞTI, A. YÖRÜKOĞLU, A. S. ERÇEVİK AND P. TERCAN. (2002). Türkiye'de İşgücü Piyasası ve İşsizlik, TÜSİAD: İstanbul.
11. HALL, R. E. (1970). “Why is the Unemployment Rate so High at Full Employment?” Brookings Papers on Economic Activity 3: 369-402.
12. HALL, R. E. (1972). “Turnover in the Labor Force” Brookings Papers on Economic Activity 3: 709-756.
13. HAMERMESH, D. S. (1986). “The Demand for Labor in the Long Run” in Orley Ashenfelter and Richard Layard, eds. Handbook of Labor Economics, North-Holland Press: Amsterdam.
14. HAMERMESH, D. S. (1993). Labor Demand, Princeton: Princeton University Press.
15. HAUSMAN, J. A. (1978). “Specification Tests in Econometrics”, Econometrica, 46, pp: 1251-1271.
16. HESHMATİ, A. AND M. NCUBE. (1998). “An Econometic Model of Employment in Zimbabwe’s Manufacturing Industries” SSE/EFI Working Paper 277. (Revised in 2003)
17. HOLDEN, K AND PEEL, D. A. (1979). “The Determinants of the Unemployment Rate: Some Empirical Evidence”, Journal of the Royal Statistical Society. Series D (The Statistician) 28(2), pp. 101-107.
18. HSİAO, C. (2003). Analysis of Panel Data, Cambridge University Press: Cambridge.
19. İLKKARACAN, I. AND R. SELİM. (2003). “The Role of Unemployment in Wage Determination: Further Evidence on the Wage Curve from Turkey” Applied Economics, 35, pp. 1589-98.
20. JOHNSTON, J. AND J. DİNARDO. (1997). Econometric Methods, McGraw-Hill International Editions, Singapore.
21. KUNCE, M. (2006). “What Factors Effect a State’s Manufacturing Employment? Evidence from 1974-1994 State Panel Data” Review of Urban and Regional Development Studies,18(1).
22. KRİSHNA, P., D. MİTRA AND S. CHİNOY. (2000). “Trade Liberalization and Labor Demand Elasticities: Evidence from Turkey” Journal of International Economics 55:391-409.
23. ONARAN, Ö. (2000). “Türkiye'de Yapısal Uyum Sürecinde Emek Piyasasının Etkinliği”, Toplum ve Bilim, 86 (Güz 2000).
24. REZA, A. M. (1978). “Geographical Differences in Earnings and Unemployment Rates” Review of Economics and Statistics 60:201-208.
25. TELLİ, Ç., E. VOYVODA AND E. YELDAN. (2006). “Turkish Economy Under the post-1998 IMF Program: Modeling General Equilibrium for Socially Responsible Macroeconomics”. Bağımsız Sosyal Bilimciler İktisat Grubu Çalışmaları, Internet Site: http://goo.gl/sPTkF Access Date: 31 July 2011.
26. TOPEL, R. H. (1986). “Local Labor Markets” Journal of Political Economy, Supplement, 94: 111-143.
27. WOOLRİDGE, J. M. (2002). Econometric Analysis of Cross Section and Panel Data, MIT Press: Massachusetts, USA.
28. WOOLRİDGE, J. M. (2003). Introductory Econometrics: A Modern Approach, South-Western: Ohio, USA.