Turkey and US Labor Markets Show Extensive Margin Dominance Over Intensive Margin
The labor markets in Turkey and the United States adjust in two ways: by changing the number of workers (extensive margin) and by changing the hours worked by each worker (intensive margin). Both adjustments are important, but the extensive margin is more significant in both countries. This is surprising because the two countries have very different levels of labor market flexibility. Turkey has a large informal sector and self-employment, which may reduce hiring and firing costs and lead to more extensive margin adjustments. High hours worked per employee in Turkey may also limit intensive margin adjustments, especially during economic booms.