The dynamics of real wages and productivity in public and private sectors: An empirical investigation for 1963-2007 period in Turkey

Asian M., Asian H. K., Yalama A.

Investment Management and Financial Innovations, vol.6, no.3, pp.179-185, 2009 (Scopus) identifier

  • Publication Type: Article / Article
  • Volume: 6 Issue: 3
  • Publication Date: 2009
  • Journal Name: Investment Management and Financial Innovations
  • Journal Indexes: Scopus
  • Page Numbers: pp.179-185
  • Eskisehir Osmangazi University Affiliated: Yes

Abstract

The aim of this paper is to investigate the long- and short-run dynamic relation between labor productivity and various sectoral real wages in Turkey for 1963-2007 period. In order to achieve these objectives, the study employs EngleGranger cointegration analysis where Zivot and Andrews's endogenous unit root is employed in measuring degree of ordering and Granger-causality analysis where Quandt-Andrews structural break test is utilized in the regression. The study finds that in the long run, the labor productivity and wages do not move too much apart from each other. The Granger causality test shows that in public sector, the real wages seem to induce labor productivity while bidirectional causality is indicated in private sector. © Murat Asian, Halil Kürşad Asian, Abdullah Yalarna, 2009.