“THE EFFECT OF IMMIGRATION ON EMPLOYMENT AND WAGES: TURKEY AS A HOST COUNTRY”

The civil war in Syria started in 2011, destroyed cities and caused many people to become homeless. Civil war caused a humanitarian disaster and followed by waves of immigration to neighboring countries such as Turkey, Lebanon, Jordan, and Iraq. Turkey has become the country that has hosted most of the refugees. The country has been exposed by mass migration waves, especially in the neighboring eastern cities. The first wave of immigration began in 2011 as Turkey has declared “Open Door Policy” and within a decade number of Syrian refugees is has reached 3.7 million in Turkey. Massive immigration waves caused Turkey to go through drastic socio-economic changes in the last decade. One of the areas got affected by the mass migration is surely the Turkish Labor Market as refugees started to participate the labor market. Historically, Turkey was not a labor market where migrants were hosted, instead it was a country that sent employees overseas, therefore participation of the Syrian refugees has caused significant changes in the market structure in terms of employment and wages. The aim of this thesis is to understand the possible impacts of the Syrian refugees in the Turkish Labor Market. Throughout the thesis, we found that around %93 of the Syrians is employed in the informal labor market in Turkey, even though the legal base exists for their formal employment through work permits. They are low skilled workers as they do not have enough education. They are creating a huge supply shock in the informal labor market especially in the sectors like garment, construction, agriculture and due to high elasticity of unskilled worker, they are imperfect substitutes for low skilled native workers. Therefore, due to supply shock and being imperfect substitutes, they cause unemployment in the informal labor market for the unskilled informal native workers and cause wages to go down, the negative impact is deeper in the Eastern provinces of the Turkey where the intensity of Syrian refugees is high and informal employment is more common. Instead, the impact on the formal labor market where high skilled native workers is employed is more limited.