Seyfettin Gürsel, Ozan Bakış and Yazgı Genç
In the research note we published earlier (see Betam Research Note 18/220, “Minimum wage negatively effects informal employment”), the effect of the increase in minimum wage on informal employment was analysed for both wage and non-wage earners (employer, own account worker and free family worker). We observed that effect of minimum wage increase is positive especially for non-wage earners.
In this research note, we are examining the effect of minimum wage on informal employment at the sector level by using the most up-to-date data. The preliminary results show that the minimum wage increase in 2016 affects the informal employment both in 2016 and 2017. However, there is a difference between the effects in 2016 and 2017. While the effect of informality is more concentrated in the low-wage sectors (sectors where workers earning minimum wage or below) in 2016, in the period of 2017 the effect, while still there, is likely to be independent of sector.