1970s have witnessed widespread and highly-politicized student protests in Turkey. Small protests turned into violent street clashes, the death toll exceeded 5,000, and a military coup came in - which resulted in mass arrests. Universities were at the centre of the turmoil and violence. Many people hesitated to continue education and, if continued, had long interruptions in education. We present a comprehensive empirical analysis of the long-term labour market consequences of this political turmoil on cohorts directly exposed to educational disruptions. First, we document that the number of new admissions and graduates in post-secondary education declined signicantly due to the turmoil and the subsequent military coup. Second, we estimate a counterfactual wage distribution for the exposed cohorts using semi-parametric methods and, then, check whether the turmoil affected their occupational structure in the long term. Finally, we use the unexpected decline in educational attainment as an instrumental variable to estimate the returns to education parameter. We find that the decline in educational attainment due to the political turmoil negatively affected the productive human capital capacity of the country by shifting the affected population from high-income occupations toward low-income ones. Accordingly, wages were compressed toward the minimum wage. Our IV estimates suggest that returns to an additional year of schooling in Turkey range between 11.6-12.8 percent for men.
Venue: UNU-MERIT, Room 0.16-0.17
Date: 27 February 2018
Time: 09:30 - 10:30