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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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Internal Migration and Wages

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Internal Migration and Wages in Turkey

Abstract: This chapter considers earning difference between internal migrants and natives in Turkey and investigates the effect of the length of the residence on this earning difference. Conflicting with the most of the existing results in the literature, we find that internal migrants in Turkey are earning significantly more compared to demographically similar natives. We also find that the relation between the wages of migrants and the duration of migration is U-shaped. This means that the wages of migrants decrease with the duration of migration up to a point and then start to increase. Moreover, by using Oaxaca-Blinder decomposition method, we find that 83 percent of this earning difference is explained by differences in the productivity characteristics and 17 percent arises from differences in returns to covariates.

Keywords: internal migrant, native, wage gap

JEL: J31, J61

1 Introduction

Internal migration has always been an important and influential socio-economic phenomenon in Turkey. Since 1950, Turkey has experienced a rapid and mass migration period mainly from eastern villages of Anatolia to western cities of the country. According to Turkish Statistical Institute’s 2015 survey, 31 percent of the whole population lives in a province different from their birthplaces. As a result of this inflow, although only 38 percent of the population was living in the cities in 1970, this figure increased to 65 percent in 2000, and to 92 percent in 2016 (Bostan, 2017). Together...

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