Effect of different price indices on linkage between real GDP growth and real minimum wage growth in Turkey
Keywords:Economic growth, minimum wages, price indices, Turkey.
AbstractThe accuracy of Turkish CPI as a price deflator is questionable especially when it comes to calculating real minimum wages. In this study we investigate the effect of different price indices on the relation between real GDP growth rates and real minimum wage growth rates by using a Granger causality analysis framework using VAR based granger causality tests. Result reveals that there is no causality between real minimu wage growth rates and real GDP growth rates in both directions. We also find a biderectional Granger causality between nominal minimum wage growth rates and COLI (an alternative price indice) growth rates. The results also showed that in line with our assumptions when an alternative deflator is used, the causality relations significantly differes.
Barrett, G.F., Brzozowski, M. (2010). "Using Engel Curves to Estimate The Bias in The Australian CPI", The Economic Record, 68 (272), 1-14. http://dx.doi.org/10.1111/j.1475-4932.2009.00594.x
Beatty, K.M., Larsen, E.R. (2005). "Using Engel Curve to Estimate Bias in The Canadian CPI As a Cost of Living Index", Canadian Journal of Economics, 38(2), 482-99. http://dx.doi.org/10.1111/j.0008-4085.2005.00289.x
Boskin (Chair), M. J., E. R. Dulberger, R. J. Gordon, Z. Griliches, D. W. Jorgenson. 1996. Final report of the Commission to Study the Consumer Price Index. U.S. Senate, Committee on Finance, Washington DC: GPO.
Costa, D.L. (2000). "American Living Standards 1888-1994: Evidence From Consumer Expenditures", NBER Working Papers, No: 7650, 1-29.
Deere, D., Murphy, K. and Welch, F. (1995). "Employment and the 1990-1991 Minimum Wage Hike." American Economic Review, 85(2), 232-37.
Dickens, R., Manning,S. ve Machin, A. (1999). "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain", Journal of Labor Economics,17(1), 1-22. http://dx.doi.org/10.1086/209911
Dickey, D. A., Fuller, W. A. (1979). "Distribution of the Estimators for Autoregressive Time Series with a Unit Root", Journal of the American Statistical Association, 74 (366), 427-431 http://dx.doi.org/10.2307/2286348
Engle, R. F., Granger, C. W. J. (1987). "Cointegration and Error Correction: Representation, Estimation and Testing," Econometrica, 55(2), 251-276. http://dx.doi.org/10.2307/1913236
Granger, C. W. J. (1969). "Investigating Causal Relations by Econometric Models and Cross- Spectral Methods", Econometrica, 37, 424-438. http://dx.doi.org/10.2307/1912791
Hamilton, B.W. (1998). "The True Cost of Living: 1974-1991", J. Hopkins University Working Paper Archive. http://krieger2.jhu.edu/economics/wpcontent/uploads/pdf/papers/wp395Hamilton.pdf (15.04.2015)
Heineke, J.M. (1979). "Exact Aggregation and Estimation", Economics Letters, 4, 157-62. http://dx.doi.org/10.1016/0165-1765(79)90227-1
Irmen, A. and Wigger, B. (2002). "National Minimum Wages, Capital Mobility and Global Economic Growth," CEPR Discussion Papers 3286..
Johansen, S. and Juselius, K. (1990), "Maximum Likelihood Estimation and Inference on Co-integration With Applications for the Demand for Money", Oxford Bulletin of Economics and Statistics, 52 (2), 169-210. http://dx.doi.org/10.1111/j.1468-0084.1990.mp52002003.x
Kaufman, B.E. (2010). "Institutional Economics and The Minimum Wage: Broadening The Theoretical and Policy Debate", Industrial and Labor Relations Review, 63(3), 427-453. http://dx.doi.org/10.1177/001979391006300304
Moosa, I.A. (1997). "Does The Chinese Official CPI Underestimate Inflation?", Applied Economics Letters, 4, 301-4. http://dx.doi.org/10.1080/758532597
Murphy, E., Garvey, E. (2005). "Cost of Living Indices and Flexible Consumption Behaviour: A Partial Critique", National University of Ireland Working Paper, No:103, 1-13.
Murphy, E., Garvey, E. (2004). "A Consumer Price Index For Low Income Households in Ireland (1989-2001)", Combat Poverty Agency Working Paper Series, No: 04/03, 1-34.
Neumark, D., Wascher, W. (2006). "Minimum Wages and Emplyment:A Review of Evidence from The New Minimum Wage Research", NBER Working Paper Series, Working Paper 12663, Cambridge:USA.
Prasch, E. (1996). "In Defence of The Minimum Wage", Journal of Economic Issues, 30(2), 391- 397. http://dx.doi.org/10.1080/00213624.1996.11505802
Rama, M. (2001). "Teh Consequences of Doubling The Minimum Wage: The Case of Indonesia", Industrial and Labour Relations Review, 54(4), 864-881. http://dx.doi.org/10.2307/2696117
SGK İstatistik Yıllıkları (2012). 5510 Sayılı Kanunun 4-1/a Maddesi Kapsamındaki Zorunlu Sigortalıların ve Prim Ödeme Gün Sayılarının Kazanç Aralıklarına, Sektörlere ve Cinsiyete Göre Dağılımı, http://www.sgk.gov.tr/wps/portal/tr/kurumsal/istatistikler/sgk_istatistik_yilliklari (15.03.2014)
Stigler, G. (1946). "The Economics of Minimum Wage Legislation" American Economic Review, 36(3), 358–65.
Stigler, G. (1961). The Price Statistics of The Federal Government. New York: National Bureau of Economic Research.
Sunal, O., Sezgin Alp, Ö. (2015). "Türkiye'de Reel Asgari Ücretler ve Reel GSYİH Değişmeleri Arasındaki Nedensellik İlişkisi: Enflasyon Oranına Endekslenmiş Bir Nominal Asgari Ücret Politikası", Ankara Üniversitesi SBF Dergisi, 70(1), 111-29. http://dx.doi.org/10.16987/ausbf.80017
TÜİK Hanehalkı İşgücü Anketi Sonuçları, İstihdam Edilenlerin Yıllara Göre İşteki Durumu, http://www.tuik.gov.tr/PreTablo.do?alt_id=1007 (15.03.2104)
TÜRK-İŞ Haber Bülteni, Şubat 2014 Açlık ve Yoksulluk Sınırı, http://www.turkis.org.tr/source.cms.docs/turkis.org.tr.ce/docs/file/acliksubat14.pdf (15.03.2014)
Yükseler, Z. (2014). "Türkiye'de Tüketim Harcamalarının Yapısı ve Gıda Harcamaları". http://www.researchgate
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) after official publication, as it can lead to productive exchanges as well as greater citation of published work (See The Effect of Open Access).