Wage Inequality and Wage Mobility in Turkey

This paper investigates wage inequality and wage mobility in Turkey using the surveys on income and living conditions. Providing the first evidence on wage mobility for Turkey, our paper also differs from the existing literature by investigating wage inequality and wage mobility over various socio-economic groups. We first present an overview of wage inequality over the period 2005-2011. Next, we compute several measures of wage mobility and explore the link between wage inequality and wage mobility. Further, emphasizing positional mobility, we compute transition matrices and investigate the determinants of transition probabilities. The results show that, overall, wage inequality exhibits a slight increase over the analysis period. Wage mobility in Turkey is lower than what is observed in European Union countries although it increases as the time horizon expands. Wage mobility has an equalizing impact on wage distribution; however, this impact is not substantial enough to overcome the high and persistent wage inequality in Turkey.