Değer, Çağaçan Middle East Technical University - Department of Economics, Turkey

Sectoral Employment and Labor Costs: Elasticity Evidence on Turkey

15044

A recurrent theme in employment policies is that reduction of labor costs would increase employment. This study aims to obtain a value for the employment elasticity of labor cost in Turkey through estimation of a sectoral employment equation. Using 3-digit ISIC Rev 3 industry data obtained from TURKSTAT, the present study performs a panel analysis. The calculated elasticities are positive, contradicting theoretical expectation., and pointing that cost reduction may not be a valid tool for employment expansion. It is also argued that the problem with the sign may be due to the data used and may actually be supportive of a wage curve.

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Labor cost , employment , panel analysis

Ege Strategic Research Journal

14