RECENT DEVELOPMENTS IN TURKISH LABOR MARKET: A CRITICAL ASSESSMENT OF TURKISH LABOR MARKET RIGIDITY

Flexibility is one of the most important issues related to labor market. Accordingly, it is frequently stated that the problem of unemployment could be solved with flexible labor markets. According to this approach, called the neo-liberal approach, institutions in labor market such as employment protection legislation, minimum wage and unions create rigidities. To increase the level of competition and solve the problem of unemployment, these rigidities should be removed. On the other hand, the impact of policies towards labor market flexibility appears to be lower wages and unsecured jobs for employees. This study aims to evaluate the development of the Turkish labor market in the context of rigidity and flexibility. The results in this paper show that Turkey has a flexible labor market contrary to common belief which states that Turkey had a rigid labor market.