Ozan Bakış, Seyfettin Gürsel and Melike Kökkızıl
Various effects of minimum wage increased in January 2016 by 30 percent are still question of debate. One of the concerns for the possible effects of this high increase is on wage-employment relation. More specifically, it stands an important question about the effect of wage increase; in which direction and to what extent it will affect the informality among wage earners. Even though relevant studies from several countries claim that the effect of minimum wage hike has no significant effect on employment, they reveal an adverse effect on informal employment. In the context of Turkey, the studies establish that relatively same increase of minimum wage recorded in 2004 has an impact on informality, albeit related publications are few. It is too early to make a comprehensive research on the effects of the recent rise in minimum wage. Nevertheless, this study illustrates a notable indication that minimum wage increase is adversely affecting informality based on the large differences observed in the share of minimum wage earners in sectors and informality rates in sectors in the period of February 2014-2015 and February 2015-2016.
pdf. ResearchBrief196