Restrictions on temporary employment and informality among young: evidence from Turkey

Altan Aldan () and Muhammet Enes Çıraklı ()
Additional contact information
Altan Aldan: Central Bank of the Republic of Turkey
Muhammet Enes Çıraklı: Central Bank of the Republic of Turkey

Economic Change and Restructuring, 2022, vol. 55, issue 3, No 8, 1496 pages

Abstract: Abstract Temporary employment is widely used in European countries for new hires to avoid strict employment protection legislation against dismissal of permanent workers. In this respect, temporary employment works as an extended probation period enabling employers to monitor the productivity of new entrants. However, the use of temporary contracts is quite limited in Turkey due to legal restrictions. We argue that the restrictions on temporary employment together with rigid job security provisions for permanent employees lead to a rise in informality among young. To test this hypothesis, we use the variation between industries in terms of the gap between the desired and actual share of temporary workers among young. Since desired share is not observed, we proxy it with the share in Germany, where legislation on temporary employment is loose and informality is negligible. We estimate a probit model using individual level data from the Household Labor Force Survey for the period 2009–2018. We find that restrictions on temporary employment increase informality among male and under-educated workers in Turkey. Our results are robust to using other countries with loose regulations on temporary employment. We should note that our results do not imply that informality merely comes from restrictions on temporary employment.

Keywords: Informality; Temporary employment; Employment protection legislation; Turkey; O17; J28; J41 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10644-021-09354-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:ecopln:v:55:y:2022:i:3:d:10.1007_s10644-021-09354-4

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/10644/PS2

DOI: 10.1007/s10644-021-09354-4

Access Statistics for this article

Economic Change and Restructuring is currently edited by George Hondroyiannis

More articles in Economic Change and Restructuring from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().