Modelling the relationship between productivity, employment and wages in Turkish small and medium sized enterprises,1981-1998

This thesis analyzes the empirical relationship between wages and productivity as well as the relationship between wages and employment in Turkish manufacturing industry. Unlike the previous studies done for manufacturing industry, in this study the size definitions of manufacturing industry, sectoral distribution and the sectoral division between public and private sector are considered. In the empirical part of the thesis, first wage and productivity and wage and employment relationships are estimated by using OLS method. After finding out both wage-productivity and wage-employment relationships are significant, descriptive growth rate comparisons are made for the period of 1981-1998. The main conclusion that emerges from both analyses is that relationship between variables of interest is valid. Wages, productivity and employment relationship have important policy implications regarding especially on Turkish small and medium sized enterprises.