Inequality of Opportunity in Wage: Estimation for Turkey1

This paper aims to examine the effects of the circumstances beyond the control of individuals on wage inequality using the Household Labor Force Survey in the period 2004-2016 in Turkey. The parametric and non-parametric inequality of opportunity estimation methods has been employed for male and female wage/salary earners separately. Parametric estimation results demonstrate that the proportion of inequality of opportunity in total wage inequality increases from 2004 to 2008 and declines afterward. Using the education level of the household head as a sole indicator of circumstances, non-parametric estimation shows that inequality of opportunity increases in the corresponding period. The percentage varies between 18.5%-24.7% and 8.8%-16.7% for females and males, respectively. The education level of the household head and the region are the most significant contributors to the inequality of opportunity in all years.