This paper presents wage curves for formal and informal workers using a rich individual level
data for Turkey over the period 2005-2009. The wage curve is an empirical regularity
describing a negative relationship between regional unemployment rates and individuals' real
wages. While this relationship has been well documented for a number of countries including
Turkey, less attention has focused on how this relationship differs for informal versus formal
employment. This is of utmost importance for less developed countries where informal
employment plays a significant role in the economy. Using the Turkish Household Labor
Force Survey observed over 26 NUTS-2 regions, we find that real hourly wages of informal
workers in Turkey are more sensitive to variations in regional unemployment rates than
wages of formal workers. This is true for all workers as well as for different gender and age
groups.