Intensive Margin and Extensive Margin Adjustments of Labor Market: Turkey versus United States

Temel Taskin

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: In this paper, we document the intensive and extensive margin adjustments of labor market in Turkey and US.We find that both margins are important. More interestingly, the weight of intensive margin adjustment is substantially smaller than that of the extensive margin in both countries. This is robust to using various data sets and methods. Common wisdom and some theory would expect these countries to divert from each other significantly, because they represent two extreme points of labor market exibility with respect to OECD Employment Protection Index. A possible explanation for our empirical result is the sizable informal sector and self employment in Turkey as it might reduce the large hiring and firing costs and encourage firms towards extensive margin adjustment, and high hours per worker which might restrict the intensive margin adjustment, especially during booms.

Keywords: intensive margin; extensive margin; labor market exibility; employment protection (search for similar items in EconPapers)
JEL-codes: J20 J60 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-ara and nep-iue
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Citations: View citations in EconPapers (3)

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https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN ... g+Paperss/2013/13-39 (application/pdf)

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Journal Article: Intensive margin and extensive margin adjustments of labor market: Turkey versus United States (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:1339

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