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Current Issues in Turkish Economics

Problems and Policy Suggestions

Edited By Çağlar Yurtseven and Mahmut Tekce

The book covers a wide range of issues in Turkish economy and aims to discuss the problems, challenges and potential of Turkey in various sectors. The topics covered in the book include areas related to macroeconomics and monetary economics (inflation expectations, determinants and conduct of monetary policy), labor economics (earning differences, overeducation in labor markets), health economics (adult obesity), tourism economics (tourism response to disruptive events) and energy economics (solar energy systems). The book is written in a format so that general readers who are interested in the Turkish economy can easily read and have a deep understanding of the current economic issues in Turkey. In addition, the book is suitable for usage in the related courses as a textbook at the undergrauate and masters level in the fields of economics and business.

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Returns to Overeducation

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Returns to Overeducation by College Major: Evidence from Turkey

Abstract: This study uses the latest available 2017 Turkish Household Labor Force Surveys and analyzes the incidence of and returns to overeducation by college major, where overeducation indicates a position in which a worker’s education level is one standard deviation above the average education level in her occupation. This chapter seeks to answer two questions: Which college majors yield to greater incidence of overeducation? Do earnings effects of being overeducated vary by college major? Two different specifications are estimated to answer these questions. First, separate logit models for male and female are estimated to see whether there are differences in the incidence of overeducation across majors. The findings indicate that there are substantial differences. Most of the fields that teach occupation-specific skills are observed not to yield high incidence of overeducation. In addition, it is found that likelihood of overeducation decreases by age both for male and female. Second, conditional earnings functions are estimated using quantile regressions to see whether earnings differences of being overeducated exist and vary by college major. The results reveal that there are earnings penalties of being overeducated and different college majors lead to strikingly different earnings losses of being overeducated.

Keywords: overducation, college major, Turkish labor market

JEL: C21, J31, I26

1 Introduction

Over the last decades, there has been a substantial expansion in the share of workers with tertiary degree in Turkish labor...

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