Some Thought Experiments on the Changes in Labor Supply in Turkey

Some Thought Experiments on the Changes in Labor Supply in Turkey

Title : Some Thought Experiments on the Changes in Labor Supply in Turkey
Number : 13/14
Author(s) : Murat Üngör
Language : English
Date : March 2013
Abstract : Turkey has the lowest hours worked (the product of total employment and annual hours per worker, divided by the size of the working-age population) among the OECD countries. We study the changes in hours of work following Ohanian, Raffo, and Rogerson (Journal of Monetary Economics, 2008) and find that the intratemporal first-order condition from the neoclassical growth model accounts for the decline in total hours worked during 1998-2009 in Turkey. Hours worked increased in Turkey since 2009 and the model accounts for half of that increase between 2009 and 2011. Our findings suggest that time-varying taxes on consumption and labor play significant roles in explaining the hours worked in Turkey. The subsistence term is quantitatively important during 2003-2011. The presence of government consumption in the utility function does not seem very important.
Keywords : Labor supply, Employment, Hours of work, Growth model, Taxes, Turkey
JEL Codes : E13; E20; E60; J22; O50

 

Some Thought Experiments on the Changes in Labor Supply in Turkey
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