ASSESSING THE DISTRIBUTIVE EFFECTS OF MINIMUM WAGE: EVIDENCE FROM TURKEY

Abstract

This study explores the effects of the 2016 minimum wage hike in Turkey on wage distribution up to 2022 by using a difference-in-differences methodology. This approach employs unconditional quantile regressions by utilizing variation in the bite of the minimum wage across NUTS2 regions in Turkey and uses data from the Turkish Household Labor Force Survey (HLSF). The findings indicate that the 2016 minimum wage increase positively affects wages in the lower quantiles while having a negative impact on wages in the higher quantiles. Consequently, this leads to a wage compression effect, ultimately resulting in a reduction in wage inequality, as supported by descriptive analysis.

Keywords

• minimum wage
• inequality
• wages

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