Minimum Wage And Job Reallocation In Türkiye

Official URL: https://risc01.sabanciuniv.edu/record=b3422591

This study investigates how the 33% minimum wage hike in Türkiye in January 2016 affected the labor market prospects of minimum wage earners. We leverage employer-employee matched administrative data, enabling us to distinguish minimum wage workers from non-minimum wage workers and track them over time. Employing a difference-in-difference approach encompassing 16 quarters between 2014 and 2017, our findings reveal that minimum wage workers experience wage increases but a lower likelihood of employment following the policy change. Interestingly, they shift towards jobs with a higher intensity of nonroutine abstract tasks, while routine and nonroutine manual tasks became less prevalent. Additionally, they reallocate to larger, more productive, and higher-paying firms.