Özet:

Low-wage employment is a type of employment that is commonly seen in the labor market of both developed and developing countries. One of the reasons for the emergence of low-wage employment is low-wage persistence. This study aims is to investigate whether low-wage persistence in the Turkish labor market and the reasons for low-wage persistence. Low-wage persistence was analyzed with a bivariate probit model with the endogenous selection that addressed initial conditions problems, using panel data from 2013-2016 (Survey on Income and Living Conditions (SILC). The results show that the initial conditions should be taken into account, low-wage persistence is present in the Turkish labor market and a considerable part of the persistence stems from true state dependence. In addition, the remaining part of the low-wage persistence can be explained by observed heterogeneity such as gender, education level, skill, and firm size.

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