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Is University Education Worth It? Minimum Wage, Labor Supply Composition and Skill-Based Wage Gap in Türkiye: 2004-2023 Period

Cilt: 9 Sayı: 2 25 Mayıs 2025
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Is University Education Worth It? Minimum Wage, Labor Supply Composition and Skill-Based Wage Gap in Türkiye: 2004-2023 Period

Abstract

This study analyzes the effect of minimum wage changes and the proportion of skilled labor in the employment on the skill-based wage gap in Türkiye. We utilize Household Labor Force Survey (HLFS) micro data sets, covering the period from 2004 to 2023. We first analyze wage disparities between skilled and unskilled groups through a Heckman-type wage equation that accounts for sample selection. Subsequently, we compute the skill-based wage gap for each year using the Blinder-Oaxaca method. Finally, we apply an econometric model where the wage gap, derived from the microdata, serves as the dependent variable. Explanatory variables are the proportion of skilled labor in employment (calculated from the microdata) and real minimum wage changes, adjusted for inflation by deflating the average annual nominal increase. This methodology allows us to explore the issue from a broader macroeconomic perspective. The results from the Heckman wage equations reveal significant differences in the effect of factors on wage determination and job-finding probabilities between skilled and unskilled employees. The econometric analysis, which examines the overall factors influencing the skill-based wage gap, reveals that a 1% rise in the minimum wage leads to a 0.15% decrease in the wage gap. Additionally, a 1% increase in the proportion of skilled workers in the workforce results in a 0.26% reduction in the wage gap. These results suggest that the wage advantage tied to education is gradually decreasing, potentially leading to a future drop in the demand for university degrees.

Keywords

Kaynakça

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  2. Autor, D. H., Manning, A. & Smith, C. L. (2016). The contribution of the minimum wage to us wage inequality over three decades: A reassessment. American Economic Journal: Applied Economics, 8(1), 58-99. https://doi.org/10.1257/app.20140073
  3. Bakis, O. & Polat, S. (2015). Wage inequality in Turkey, 2002–10. Economics of Transition, 23(1), 169-212. https://doi.org/10.1111/ecot.12058
  4. Bakis, O., & Polat, S. (2023). Wage inequality dynamics in Turkey. Empirica, 50, 657-694. https://doi.org/10.1007/s10663-023-09579-8
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  6. Becker, G. (1964). Human capital. Chicago: The University of Chicago Press.
  7. Blinder, S. A. (1973). Wage discrimination: Reduced form and structural estimates. The Journal of Human Resources, 8, 436-455. https://doi.org/10.2307/144855
  8. Caner, A., Demirel-Derebasoglu, M. & Okten, C. (2022). Higher education expansion and college wage premium: Evidence from Turkey. Betam Working Paper. https://betam.bahcesehir.edu.tr/wp-content/uploads/2022/09/Higher-Education-Expansion-and-College-Wage-Premium-Evidence-from-Turkey.pdf

Ayrıntılar

Birincil Dil

İngilizce

Konular

Ekonometri (Diğer) , Mikroekonomik Teori , Çalışma Ekonomisi

Bölüm

Araştırma Makalesi

Yayımlanma Tarihi

25 Mayıs 2025

Gönderilme Tarihi

23 Kasım 2024

Kabul Tarihi

24 Ocak 2025

Yayımlandığı Sayı

Yıl 2025 Cilt: 9 Sayı: 2

Kaynak Göster

APA
Akgül, T. (2025). Is University Education Worth It? Minimum Wage, Labor Supply Composition and Skill-Based Wage Gap in Türkiye: 2004-2023 Period. Fiscaoeconomia, 9(2), 985-1002. https://doi.org/10.25295/fsecon.1590196

Cited By

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