An investigation of income profiles in Turkey

Abstract

In this paper, I empirically investigate the labor income profiles in Turkey over age, gender, educational attainment and public-private sector employment. I first document that the average labor income profile over age is quite flat yet non-decreasing in Turkey, contrary to the observed hump-shaped profile in developed countries. This pattern is the result of aggregation, as there is a considerable degree of heterogeneity in income profiles over the highlighted characteristics. I show that the private sector income profiles display a higher degree of cross-sectional variation across individuals over the same age groups, especially among university graduates. Having established the results, I turn to verifying my predictions employing both OLS with different datasets and a pseudo-panel estimation approach via the synthetic cohorts I generate. My econometric findings provide robustness and verify the validity of the significance of my findings.