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Wage Inequality and Returns to Education in Turkey: A Quantile Regression Analysis
Author(s) -
Tansel Aysit,
Bodur Fatma Bircan
Publication year - 2012
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/j.1467-9361.2011.00655.x
Subject(s) - quantile regression , economics , openness to experience , wage , inequality , ordinary least squares , wage inequality , distribution (mathematics) , labour economics , quantile , demographic economics , econometrics , psychology , social psychology , mathematical analysis , mathematics
This paper investigates the male wage inequality and its evolution over the 1994–2002 period in Turkey by estimating Mincerian wage equations using ordinary least squares and quantile regression techniques. Male wage inequality is high in Turkey. While it declined at the lower end of the wage distribution it increased at the top end of wage distribution. Education contributed to higher wage inequality through both within and between dimensions. The within‐groups inequality increased and between‐groups inequality decreased over the study period. The latter factor may have dominated the former contributing to the observed decline in the male wage inequality over the 1994–2002. Further results are provided for the wage effects of experience, public sector employment, geographic location, firm size, industry of employment and their contribution to wage inequality. Recent increases in foreign direct investiment inflows, openness to trade and global technological developments are discussed as contributing factors to the recent rising within‐groups wage inequality.