Seyfettin Gürsel and Mine Durmaz
Our second research brief studying the problem of informality focuses on regional disparities. There are large differences in regional rates of informal employment. According to 2013 data, while the country’s informality rate of 37 percent is soaring to 70 percent in Southeast region, it recorded about 16 percent in Ankara and Istanbul. The rate of informality for wage earners, which is reported as 20 percent overall, is more than 40 percent in Southeast region and ranges between 10 and 16 percent in highly industrialized western regions. In addition, significant decrease in overall informality at country level in the period 2005-2013 has been unequal through regions. While the overall informality rate decreased by 38 percent, it has been reduced by more than half in western regions. Correspondingly, decreases are more limited in other regions, but also in some regions informality increased.
The main force behind regional disparities in terms of informality is regional differences in structural determinants of informality such as average level of education, average firm size, or sectoral distribution of employment- that affect the level of informal employment. In last eight years, this unequal improvement in informality across regions arises from unequal regional changes in these structural determinants.
doc. ResearchBrief172
pdf. ResearchBrief172