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Titel
Consumer loan response to permanent labor income shocks: evidence from a major minimum wage increase / Ibrahim Ethem (Guney Central Bank of the Republic of Turkey), Yavuz Selim Hacihasanoglu (Central Bank of the Republic of Turkey), Semih Tumen (Central Bank of the Republic of Turkey, ERF and IZA) ; IZA, Institute of Labor Economics
VerfasserGuney, Ibrahim Ethem ; Hacihasanoglu, Yavuz Selim ; Tumen, Semih In der Gemeinsamen Normdatei der DNB nachschlagen
KörperschaftForschungsinstitut zur Zukunft der Arbeit In der Gemeinsamen Normdatei der DNB nachschlagen
ErschienenBonn, Germany : IZA Institute of Labor Economics, April 2017
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Umfang1 Online-Ressource (30 Seiten) : Diagramme
SerieDiscussion paper ; no. 10751
URNurn:nbn:de:hbz:5:2-123630 Persistent Identifier (URN)
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Consumer loan response to permanent labor income shocks: evidence from a major minimum wage increase [0.39 mb]
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Zusammenfassung

We investigate the impact of a substantial minimum wage increase, which became effective in January 2016, on consumer loans in Turkey. Using bank-level data and designing an original identification strategy, we ask whether the loans provided by banks with a historically high share of low-wage loan customers have increased relative to those provided by banks with a historically low share of low-wage loan customers after January 2016. Our results suggest that consumer loan flows have displayed a limited but statistically and economically meaningful increase following the minimum wage hike. This increase mostly comes from the increase in long-term general-purpose loans. Vehicle loans have also increased, while there is no change in housing loans. In the overall, the minimum wage hike has generated a moderate and transitory increase in the flow of consumer loans extended to low-wage earners in Turkey - perhaps due to delayed consumption effect. Consumption of durables, which can further increase household borrowing capacity through collateralized debt channel, has only slightly and temporarily increased. The underlying long-term trends in the stock of consumer loans have hardly changed.