Abstract:

The devastating effects of the COVID-19 pandemic on labor markets have been experienced across the globe, and Turkey is no exception. Worldwide, millions of workers lost their jobs or contracts or had to work fewer hours and had lower wages. The International Labour Organization estimates that at least 125 million full time jobs were lost. The pandemic has had a devastating impact on employment in general and a particularly severe one on the informal sector as these employees with no social protection are the most affected. This study tests whether there are differences in job loss and unemployment between formal and informal sectors in Turkish labor markets resulting from the pandemic. The data for testing are compiled according to NUTS-2 using the TSI’s data portal. The changes in the size of employment in formal and informal sectors between 2019 and 2020 are obtained according to regional units. In addition to the change in total employment volumes, employment tests regarding education, workplace scale, and gender proportion are conducted. The findings indicate a significant disintegration between formal and informal sectors according to change in employment. In addition, although the pandemic did expand employment opportunities in the formal sector, it clearly caused a severe contraction in informal sector employment. This indicates that the pandemic has led to a considerable number of job losses by those employed in the informal sector, exposing them to a severe risk of poverty.

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