An econometric study on the relationship between minimum wage and employment in Turkey

The impact of recent increases in the minimum wage level in Turkey on the economy and our social life has been one of the most discussed issues in public policies. There are different opinions in economic history regarding the effects of the minimum wage on the economy. However, the wage determines the living standards of the employee and even creates his social status. In addition to being a social policy tool, the minimum wage also affects macroeconomic variables. The aim of this study is to examine the relationship between minimum wage and employment. In the study, the relationship between minimum wage and employment in Turkey was examined through empirical analysis with reference to the years 1992-2021. This relationship was used using the ARDL technique. In addition, long-term forecast results were examined with DOLS and FMOLS techniques. In the analysis, it was determined that the minimum wage reduces employment in the short and long term. It has been observed that increases in the minimum wage level in Turkey negatively affect the employment level. According to the results obtained with ARDL, DOLS and FMOLS methods, the increase in the minimum wage is mostly It is observed that the affected sector is the service sector. In addition, minimum wage, women and When the impact on male employment is examined, it is seen that the decrease in female employment is greater than that of male employment in all three methods. Key Words: Minimum Wage, Employment, ARDL, DOLS, FMOLS