TEST OF THE PAUPER LABOR ARGUMENT: THE CASE OF TURKISH MANUFACTURING SECTOR

Nejat ERK (Çukurova University)
Tuba DİREKÇİ (Çukurova University)

Economists have long taken an interest in competitiveness issues, though without necessarily using such terminology. Policy makers have regarded the problems confronting them as for the most part specific to time and place; though in the long-term historical perspective we can see that this is not so, and that continuity rather than change has characterized labor wage competitiveness.

The present paper tests the validity of pauper labor argument for Turkish manufacturing sector. Dynamic time series model adapted, will be testing wage and labor productivity innovation on export competitiveness of Turkish manufacturing sector. Since labor accounts for a sizeable share of the variable costs of manufacturing sector, a manufacturing sub sector that exports with low wages versus with relatively high labor productivity will clarify whether Turkey can still promote labor intensive production towards its export promotion.