{"id":5234,"date":"2013-09-20T10:23:36","date_gmt":"2013-09-20T08:23:36","guid":{"rendered":"http:\/\/betam.bahcesehir.edu.tr\/?p=5234"},"modified":"2015-05-21T10:25:06","modified_gmt":"2015-05-21T08:25:06","slug":"firm-size-wage-gaps-along-the-formal-informal-divide-theory-and-evidence","status":"publish","type":"post","link":"https:\/\/betam.bahcesehir.edu.tr\/en\/2013\/09\/firm-size-wage-gaps-along-the-formal-informal-divide-theory-and-evidence\/","title":{"rendered":"Firm-Size Wage Gaps Along the Formal-Informal Divide: Theory and Evidence"},"content":{"rendered":"<p><strong>Binnur Balkan (Central Bank of the Republic of Turkey),\u00a0Semih Tumen (Central Bank of the Republic of Turkey)<\/strong><\/p>\n<p><strong>Abstract<\/strong><\/p>\n<p>Observationally equivalent workers are paid higher wages in larger fi\frms. This fact is often named as the \u201cfirm-size wage gap\u201d and is regarded as a key empirical puzzle. Using a nationally representative micro-\u00a0level survey data from Turkey, this paper documents a new stylized fact: the \ffirm-size wage gap is more\u00a0pronounced for informal (unregistered) jobs than for formal (registered) jobs. To explain this fact, we\u00a0develop a two-stage wage-posting game with market imperfections and segmented markets, the solution\u00a0to which produces wages as a function of \ffirm size in a well-de\ffined subgame-perfect equilibrium. The\u00a0model proposes two distinct mechanisms. First, setting high tax rates on formal activity generates a wedge\u00a0between formal and informal size wage gaps. Thus, government policy can potentially aff\u000bect the magnitude\u00a0of the firm-size wage gaps. We provide auxiliary empirical evidence justifying this \ffinding. The model is\u00a0able to explain the stylized fact through a second mechanism-even when the tax dimension is shut down.\u00a0Higher wages off\u000bered by a larger fi\frm for a formal job can attract a larger number of applicants, than the\u00a0same amount o\u000bffered by the same \ffirm can attract for an informal job. The larger pool of applicants for\u00a0the formal job, in turn, enables the fi\frm to keep the size diff\u000berentials modest, while this mitigating e\u000bffect\u00a0is weaker for informal jobs.<\/p>\n<p><em><strong>pdf.\u00a0<a href=\"http:\/\/betam.bahcesehir.edu.tr\/wp-content\/uploads\/2015\/05\/WorkingPaper012.pdf\">WorkingPaper#012<\/a><\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Binnur Balkan (Central Bank of the Republic of Turkey),\u00a0Semih Tumen (Central Bank of the Republic of Turkey) Abstract Observationally equivalent workers are paid higher wages in larger fi\frms. This fact is often named as the \u201cfirm-size wage gap\u201d and is regarded as a key empirical puzzle. Using a nationally representative micro-\u00a0level survey data from Turkey, [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[255],"tags":[],"class_list":["post-5234","post","type-post","status-publish","format-standard","hentry","category-kategorisiz-en"],"_links":{"self":[{"href":"https:\/\/betam.bahcesehir.edu.tr\/en\/wp-json\/wp\/v2\/posts\/5234","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/betam.bahcesehir.edu.tr\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/betam.bahcesehir.edu.tr\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/betam.bahcesehir.edu.tr\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/betam.bahcesehir.edu.tr\/en\/wp-json\/wp\/v2\/comments?post=5234"}],"version-history":[{"count":1,"href":"https:\/\/betam.bahcesehir.edu.tr\/en\/wp-json\/wp\/v2\/posts\/5234\/revisions"}],"predecessor-version":[{"id":5236,"href":"https:\/\/betam.bahcesehir.edu.tr\/en\/wp-json\/wp\/v2\/posts\/5234\/revisions\/5236"}],"wp:attachment":[{"href":"https:\/\/betam.bahcesehir.edu.tr\/en\/wp-json\/wp\/v2\/media?parent=5234"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/betam.bahcesehir.edu.tr\/en\/wp-json\/wp\/v2\/categories?post=5234"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/betam.bahcesehir.edu.tr\/en\/wp-json\/wp\/v2\/tags?post=5234"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}