Publications
Please click journal names to access published articles. You can access working paper versions by clicking the article names. You can also find working papers on my ResearchGate profile.
Immigration and Prices: Quasi-Experimental Evidence from Syrian Refugees in Turkey (published in Journal of Population Economics, joint with S. Tümen)
We exploit the regional variation in the unexpected (or forced) inflow of Syrian refugees as a natural experiment to estimate the impact of immigration on consumer prices in Turkey. Using a difference-in-differences strategy and a comprehensive data set on the regional prices of CPI items, we find that general level of consumer prices has declined by approximately 2.5 percent due to immigration. Prices of goods and services have declined in similar magnitudes. We highlight that the channel through which the price declines take place is the informal labor market. Syrian refugees supply inexpensive informal labor and, thus, substitute the informal native workers especially in informal labor intensive sectors. We document that prices in these sectors have fallen by around 4 percent, while the prices in the formal labor intensive sectors have almost remained unchanged. Increase in the supply of informal immigrant workers generates labor cost advantages and keeps prices lower in the informal labor intensive sectors.
Firm-Size Wage Gaps Along the Formal-Informal Divide: Theory and Evidence (published in Industrial Relations, joint with S. Tümen)
Observationally equivalent workers are paid higher wages in larger firms. This fact is often named as the “firm-size wage gap” and is regarded as a key empirical puzzle. Using a nationally representative micro- level survey data from Turkey, this paper documents a new stylized fact: the firm-size wage gap is more pronounced for informal (unregistered) jobs than for formal (registered) jobs. To explain this fact, we develop a two-stage wage-posting game with market imperfections and segmented markets, the solution to which produces wages as a function of firm size in a well-defined subgame-perfect equilibrium. The model proposes two distinct mechanisms. First, setting high tax rates on formal activity generates a wedge between formal and informal size wage gaps. Thus, government policy can potentially affect the magnitude of the firm-size wage gaps. We provide auxiliary empirical evidence justifying this finding. The model is able to explain the stylized fact through a second mechanism-even when the tax dimension is shut down. Higher wages offered by a larger firm for a formal job can attract a larger number of applicants, than the same amount offered by the same firm can attract for an informal job. The larger pool of applicants for the formal job, in turn, enables the firm to keep the size differentials modest, while this mitigating effect is weaker for informal jobs.
Overview of Firm-Size and Gender Pay Gaps in Turkey: The Role of Informal Employment (published in Ekonomi-tek, joint with G. Akar and S. Tümen)
This paper documents two new findings linking firm-size and gender pay gaps to informal employment using micro-level data from Turkey. First, we show that the firm-size wage gap, defined as larger firms paying higher wages to observationally equivalent workers, is greater for informal employment than formal employment. And, second, we find that the gender pay gap is constant across different firm-size categories for formal employment, while it is a decreasing function of firm size for informal employment. These two facts jointly suggest that the informality status of a job is a valuable source of information in understanding the underlying forces determining firm-size and gender wage gaps. We propose and discuss the relevance of alternative mechanisms that might be generating these facts.