Seyfettin Gürsel and Mine Durmaz
During the period of 2005-2013, informal employment declined significantly. Overall informality rate decreased from 48.2 percent to 36.8 percent and informality in non-agricultural sectors fell from 34.3 percent to 22.4 percent. The main force behind this improvement is the decline in informality among wage earners. However, the decrease of informality rate for self-employed workers is limited. Hence, the problem of informality in Turkish labor market requires studying these two categories of employment separately. The main reason for the decline in informality among wage earners is that newly created jobs in recent years are mostly formal jobs. Informal employment is substantially a consequence of social and structural features of labor force. In addition, the level of informal employment is affected by economic conjecture. According to seasonally adjusted monthly data over last eight years, overall informality rate followed a fluctuating trend. In next research brief, trend in the rate of informality over time will be discussed.
The main structural features studied in this research brief point out that the problem of wage earners’ informality is associated with the problem of small size of the firms. According to 2013 data, third-fourth of informal wage earners is employed in micro firms (0-9 workers). When informal employment in SMS’s (10-24 workers) is added to this share, it reaches 85 percent. Findings of this study reveal that policies aimed at reducing structural informality in the employment category of wage earners need to prioritize reducing out-of-labor costs, encouraging firms in size enlargement, and increasing frequency of inspection.
doc. ResearchBrief171
pdf. ResearchBrief171