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THE SIZE AND CONTRIBUTION OF THE INFORMAL SECTOR IN THE LABOUR MARKET: SOME EVIDENCE FROM TURKEY

The informal sector has been in existence far longer than the now glorified formal sector and its contribution to the general economy is almost always underestimated. In some countries, the informal sector plays a much important role in the economy while it is rather not given as much attention in others, that is not to say the informal sector is not as important as the formal sector. In this study, I strive to determine how informal the labour market in Turkey is on one hand, and the sector’s contribution in relation to the total market economy of Turkey. I shall try to first, clarify the possible notions that arise when the term informal sector is mentioned, explain instances at which an activity or employment is considered informal, both universally and in Turkey. I employ labour data from the Turkish institution TUIK as well as from the European Union’s database Eurostat for the technical analyses from which I shall understand how big or small and how contributive the informal sector of the Turkish labour market is. I try to dissect some of the determinants of the growth or decline of the informal sector as well.

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