Turkey - Country Economic Memorandum Informality : Causes, Consequences, Policies

Turkey - Country Economic Memorandum Informality : Causes, Consequences, Policies

Informality in Turkey, using various definitions, and despite the signs of a recent decline in certain segments of the economy, is widespread. The level of informality is not excessively high, however, taking into account Turkey's level of inc...

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Bibliographic Details
Main Author:	World Bank
Format:	Country Economic Memorandum
Language:	English
Published:	World Bank 2012
Subjects:	ACTIVE LABOR AGE GROUP AGE GROUPS AGGREGATE INCOME AGRICULTURE AUDITS BANK CREDIT BANKING CRISIS BANKING REGULATION BASE YEAR BENEFICIAL EFFECTS BUSINESS ENVIRONMENT BUSINESS PRACTICES BUSINESS REGULATIONS CASH PAYMENT CASH PAYMENTS CASH TRANSFER CASUAL WORKERS CHECKS CLERKS COMPENSATORY POLICIES CORPORATE TAXES CRAFTSMEN CREDIT CARDS CURRENCY DEPOSIT DEVELOPING ECONOMIES DIVIDEND DRIVERS EARLY RETIREMENT ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC COOPERATION ECONOMIC CRISIS ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIES OF SCALE EDUCATIONAL ATTAINMENT ELASTICITY EMERGING MARKET EMERGING MARKET ECONOMIES EMPLOYEE EMPLOYMENT EMPLOYMENT COMPOSITION EMPLOYMENT EFFECTS EMPLOYMENT LEGISLATION EMPLOYMENT PROTECTION LEGISLATION EMPLOYMENT STATUS ENTERPRISE PERFORMANCE EXPECTED VALUE EXPENDITURE FACTORS OF PRODUCTION FEMALE LABOR FIRM PERFORMANCE FIRM SIZE FIRM SURVEY FIRM SURVEYS FIRM-LEVEL ANALYSIS FLEXIBLE LABOR MARKETS FOREIGN DIRECT INVESTMENT FORMAL SECTOR WORKERS FREE RIDER FREE TRADE GDP GDP PER CAPITA GOVERNMENT REVENUE GOVERNMENT REVENUES GROSS DOMESTIC PRODUCT GROSS WAGE GROWTH POTENTIAL GROWTH RATE HEALTH INSURANCE HOLDING HOUSEHOLD INCOME HOUSEHOLD SURVEYS HUMAN CAPITAL INCENTIVE EFFECTS INCOME GROWTH INCOME LEVEL INCOME LEVELS INCOME SHOCKS INCOME TAX INCOME TAXES INCOMES INFORMAL ECONOMY INFORMAL EMPLOYMENT INFORMAL SECTOR INFORMATION TECHNOLOGY INNOVATION INSURANCE PREMIUMS INTERNATIONAL STANDARDS INVESTMENT CLIMATE JOB LOSSES JOB OFFER JOBS LABOR COSTS LABOR DEMAND LABOR FORCE LABOR LAW LABOR LEGISLATION LABOR MARKET LABOR MARKET FLEXIBILITY LABOR MARKET REFORMS LABOR MARKET REGULATIONS LABOR MARKETS LABOR ORGANIZATION LABOR PRODUCTIVITY LABOR REGULATION LABOR REGULATIONS LABOR SUPPLY LABOR UNIONS LAYOFFS LEVEL PLAYING FIELD MACROECONOMIC STABILIZATION MALE WORKERS MARKET ECONOMIES MARKET PLAYERS MICRO DATA MIDDLE-INCOME COUNTRIES MINIMUM WAGE NET EMPLOYMENT NET EMPLOYMENT EFFECTS OCCUPATION OCCUPATIONS OLDER WORKERS OUTPUT PAID WORKER PAID WORKERS PENSION PENSION SYSTEM PERFORMANCE INDICATORS PERSONAL INCOME POLICY RESPONSE POTENTIAL OUTPUT POWER PARITY PREVIOUS STUDIES PREVIOUS WORK PRIMARY EDUCATION PRIVATE FIRM PRIVATE SECTOR PRODUCTIVE ACTIVITIES PRODUCTIVITY EFFECTS PRODUCTIVITY GAINS PRODUCTIVITY GAP PRODUCTIVITY LEVELS PUBLIC SERVICES PUBLIC SPENDING PUBLIC UTILITY PURCHASING POWER RAPID EXPANSION REAL ESTATE REAL INCOME REGULAR EMPLOYMENT REGULAR WORKERS REGULATORY AUTHORITY REGULATORY BODY RETIREMENT AGE RETURNS RULE OF LAW RURAL EMPLOYMENT SAFETY SAFETY NET SAFETY NETS SAFETY STANDARDS SALARIED WORKERS SECRETARIES SELF EMPLOYMENT SEMISKILLED WORKERS SERVICE SECTOR SEVERANCE BENEFITS SEVERANCE PAY SEVERANCE PAYMENTS SKILLED LABOR SKILLED WORKERS SOCIAL CAPITAL SOCIAL COHESION SOCIAL PROTECTION SOCIAL SAFETY NET SOCIAL SAFETY NETS SUPPLIERS SUSTAINABLE GROWTH TAX COLLECTION TAX LIABILITIES TAX OBLIGATIONS TAX POLICIES TAX POLICY TAX RATES TAX REVENUES TAX STRUCTURE TAX SYSTEM TAXATION TOTAL EMPLOYMENT TOTAL FACTOR PRODUCTIVITY TOTAL LABOR FORCE TRACK RECORD TRADE UNIONS TRANSPARENCY TREASURY UNDERVALUATION UNEMPLOYMENT UNEMPLOYMENT INSURANCE UNEMPLOYMENT INSURANCE BENEFITS UNFAIR COMPETITION UNPAID FAMILY WORKERS UNSKILLED LABOR UNSKILLED WORKERS URBANIZATION VALUE ADDED WAGE DIFFERENTIAL WAGE DIFFERENTIALS WAGE EMPLOYMENT WAGE GAP WAGES WORKER WORKER PRODUCTIVITY WORKERS WORKING CONDITIONS YOUNG WORKERS YOUNGER WORKERS
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000333038_20100421001215 http://hdl.handle.net/10986/2843

Description
Summary:	Informality in Turkey, using various definitions, and despite the signs of a recent decline in certain segments of the economy, is widespread. The level of informality is not excessively high, however, taking into account Turkey's level of income. While firm non-registration is not very common, underreporting of revenues and wages and non-registration of workers with the social security system are more prevalent. This report argues that success in reducing informality requires an integrated policy response. While no single 'sufficient' policy tool will be likely to increase formalization significantly, a combination of policies may move the economy to a new equilibrium with higher formalization. The report discusses the need to strengthen auditing capacity, effectiveness and targeting, to ease labor market regulations, and to communicate effectively with the public on the costs of informality and the benefits of formalization. This report is organized in six chapters. The second chapter introduces definitions and the conceptual framework for the analysis conducted. The third chapter provides a portrait of informality in Turkey, outlines certain issues of measurement, and presents the main trends using various decompositions. The fourth and fifth chapters discuss the costs (consequences) and the causes of informality, respectively, with a specific focus on informal employment. The final chapter presents a suggested integrated policy approach to reduce informality and provides concluding remarks.

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