Regional dynamics of wage and wage distribution in Turkey: 2004-2014

Factors such as education level, gender, work experience, age, marital status, household size, sector, capital used per worker are effective on determination of wage and wage distribution. There is a heterogeneity in the distribution of labor force over these factors in Turkey, both at regional and sectoral levels. Heterogeneity between regions and sectors regarding the labor force, in turn, cause to discrepancies in determination of wage and in wage distribution. In this study; in order to reveal the differences in wage determination at sectoral and regional levels empirically, a wage equation is designed in the scope of Heckman Selection model and using the STATA econometrics software the equation is tested over the micro dataset of 2004-2014 period Household Labor Force Survey, which is executed by Turkish Statistical Institute. The findings of study show that there are differences regarding significance levels and coefficient magnitudes of factors determining the wage at sectoral and regional level in the mentioned period. In addition, wage distribution regarding the region, sector, gender, education level and rural/urban residence axes is analyzed with the help of computing the Gini decomposition with STATA. Empirical findings show that there is heterogeneity among regions and sectors regarding the wage distribution and wage distribution worsen in the mentioned period. Keywords: Wage Equation, Regional and Sectoral Differences, Heckman Selection Model, Wage Distribution, Household Labor Force Survey