Akademik Veri Yönetim Sistemi
Bogazici Journal, cilt.35, sa.2, ss.98-136, 2021 (Scopus)
This paper studies the wage and employment effects of the minimum wage under the presence of high informality in the labour market. The paper assesses several minimum wage incidence parameters, and analysis suggests that the choice of the minimum wage incidence parameter significantly affects the results. For assessing the credibility of different measures, the study proposes a novel approach for the minimum wage incidence, which differentiates the effects on formal and informal workers. Results suggest that minimum wage leads to an increase in formal wages, but there exists weaker evidence for a significant effect on informal market wages. There is no adverse effect of the minimum wage on total employment, but there is a transition from formal employment to informal employment. However, the increase in informal employment is partly due to increased labour force participation. Both the wage and employment effects are stronger for women, as they get paid less than men. Although the minimum wage is set for a calendar month, there exist no significant changes in the working hours of formal and informal workers