LABOR FORCE STATUS AND INCOME DISPARITY - EVIDENCE FROM TURKEY

The nature of the informal sector is a much debated issue. Is working in the informal sector a choice or a constraint? What is the relation between informality and poverty? Theoretically, both are possible, and in this sense, the informal sector bears its own dualism (Fields, 1990, 2005). Consequently, the answer is an empirical issue. In this study, we aim at providing further information about the Turkish labor market using the 2003 and 2008 Household Budget Surveys (HBS) which allows combining income levels with labor force status. We compare income according to five labor force statuses: non-participant, unemployed, worker in the formal sector and worker in the informal sector (agricultural and non-agricultural), and relate findings to poverty. We investigate data to see whether observable heterogeneities in terms of income exist not only between the different statuses, but also within the informal sector.