A study on the primary components of income: A case of Turkey

The objective of this study is to analyze the effects of social, economic, and individual factors on individual earnings. This research study is motivated by Becker's Human Capital Model and Mincer's studies on wage models. The empirical analyses are conducted on a unique micro data set compiled by Turkish Statistical Institute's (TURKSTAT) in 2011, named Household Budget Survey and Income Distribution. The data set covers an effective sample size of 9,918 households and 37,121 individuals who are interviewed by TURKSTAT periodically. First, basic wage models are studied and then, these models are enriched by adding a gender effect. The findings indicate that the males earn more than females with similar characteristics, which confirm the existence of gender wage gap among economically active Turkish population. Moreover, vocational high school graduates perform economically better than other high school graduates. The study reveals other significant relationships between the earnings of economically active population and the primary determinants of income that are included in the models. Keywords: Wage Differentials, Mincer Wage Equation, Human Capital Theory