Zeynep DENİZ DERVİŞEN

Skilled and Unskilled Labor Efficiencies in Turkish Manufacturing Industry (1992 - 2001)

2011

(Supervisor: A. Suut Doğruel)

ABSTRACT

The main objective of this dissertation is to calculate the time series of labor efficiency terms of the proposed extended Cobb-Douglas production function for the Turkish manufacturing industry for the years between 1992 – 2001 with the data supplied by TurkStat. Then, the trends that the labor efficiencies follow will be evaluated to specify the direction of the technical change for each sample and overall manufacturing industry. The production function exhibits constant elasticity of substitution which includes skilled labor, unskilled labor, efficiencies of both labor types and capital stock as factors of production. The OECD taxonomy which accounts for the technology levels of sectors and relational stratification analysis (RSA) which is carried out specific to Turkish manufacturing industry are used to construct the samples for the main model. OECD taxonomy divides the data as high technology required sectors, upper-middle technology required sectors, lower – middle technology required sectors and low technology required sectors where as RSA classifies the data as high-skilled labor required sectors, middle-skilled labor required sectors and low-skilled labor required sectors. After estimating the elasticity of substitution between skilled and unskilled labor and the capital share for each group, the model is solved for overall manufacturing industry, OECD taxonomy and RSA. According to results, overall manufacturing sector has an unskilled labor augmenting technical change. Additionally, unskilled labor augmenting technical change is observed in most of the groups however it is more significant especially in the low technology required sectors and low-skilled labor required sectors.