PUBLICATIONS:
A Practitioner’s Guide to Handling Irregularities Resulting from the 2014 Revisions to the Turkish Household Labor Force Survey (with Murat Demirci) [pdf] (Boğaziçi Journal Review of Social, Economic and Administrative Studies, 35(1), 2021)
We document implications of the 2014 revisions to the Turkish Household Labor Force Survey and offer guidance on how to handle the irregularities in population and unemployment statistics that resulted from two particular revisions. First, new population projections were adopted to assign survey weights. Second, a narrower definition of unemployment was adopted. We propose methods to adjust the survey weights for the pre-2014 period in order for the changes to the population statistics by age groups and regions to be discerned without interruption over time and to calculate the unemployment rates according to both broader and narrower definitions since 2004.
Post-compulsory schooling of youth in Turkey: a case of pro-cyclical enrollment (with Murat Demirci) [Link] (International Journal of Manpower, Vol. 45 No. 7, pp. 1450-1473, 2024)
Purpose
This study investigates the effect of business cycles on school enrollment in Turkey. During recessions, school enrollment might increase as opportunity cost of schooling declines, yet it might also decrease because of reduced income households have for education. Which effect dominates depends on the context. We empirically explore this in a context displaying canonical features of developing countries.
Design/methodology/approach
Using the Turkish Household Labor Force Survey data for a period covering the Great Recession, we estimate the effect of unemployment rate separately for enrollments in general and vocational high schools and in undergraduate programs. To understand the cyclicality, we use a probit model with the regional and time variations in unemployment rates. We also build a simple theoretical model of work-schooling choice to interpret the findings.
Findings
We find that the likelihood of enrolling in general high schools and undergraduate programs declines with higher adult unemployment rates, but the likelihood of enrollment in vocational high schools increases. Confronting these empirical findings with the theoretical model suggests that the major factor in enrollment cyclicality in Turkey is how parental resources allocated to education change during recessions by schooling type.
Originality/value
Our finding of pro-cyclical enrollment in academically oriented programs is in contrast with counter-cyclicality documented for similar programs in developed countries, which highlights the importance of income related factors in developing-country contexts. Our heterogeneous findings for general and vocational high schools are also novel.
WORKING PAPERS:
Uncertainty, Unemployment and Business Cycles [Link]
I build a dynamic, stochastic, general equilibrium model of heterogeneous firms with aggregate shocks to analyze the effects of time-varying idiosyncratic volatility on the unemployment rate. Firms can hire more than one worker and are heterogeneous in both productivity and size. The irreversible labor adjustment costs that firms face originate from the Diamond-Mortensen-Pissarides type random search-and-matching in the labor market. Simulated data shows that the model explains 60$\%$ of the variation in unemployment and 54$\%$ of the variation in vacancies, while it also performs well in explaining consumption and investment dynamics. In addition, impulse-response analysis shows that a rise in idiosyncratic volatility increases the unemployment rate. Even though employment declines, household ends up with a lager total wage bill, since resources are allocated from less productive firms to more productive ones. As a result, consumption also rises. As an extension, a more realistic joint shock process that allows negative correlation between aggregate productivity and idiosyncratic volatility is adopted. The extended model generates responses which are more in line with the empirical evidence on recessionary effects of uncertainty shocks. In particular, consumption and investment decline as unemployment rate increases in response to a positive volatility shock.
WORK IN PROGRESS:
The Price Elasticity of Demand for New Automobiles in Turkey: A Case with High Rates of Special Consumption Taxes (with Murat Demirci and Berna Tuncay Alpanda)
Turkey applies the highest tax rates in sales of new automobiles in Europe due to a special consumption tax levied in the range from 45% to 220%. In this study, we estimate the price elasticity of demand for new automobiles in Turkey with model-level data from the 2018-19 period. The automobile market in Turkey was struck with two major events in this period: a depreciation of the local currency and a temporary reduction in the tax rates. Using the effective exchange rates and the taxation as instruments for automobile prices, we find that the demand for new automobiles is price inelastic for an average model. The analysis by the segments of automobiles shows that the demand is elastic for the segment with the least expensive models.
BOOK CHAPTERS IN EDITED VOLUMES:
“Regional Unemployment Rates in Turkey during the 2004-2019 Period” (with Murat Demirci)
Published in Scientific Perspectives of Economics and Finance, (pp. 67-78) (Ed. S. Karabulut) by Ekin Yayınevi, July 2023. ISBN: 978-625-6460-54-6.
“The Sensitivity of Empirical Applications to the 2014 Revisions to the Turkish Household Labor Force Survey” (with Murat Demirci) [pdf]
Published in Theoretical and Empirical Perspectives on Economic and Financial Issues (pp. 145-159) (Ed. S. Karabulut) by Gazi Kitabevi, August 2021. ISBN: 978-625-7530-05-7.