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The Determinants Of Employment: A Sectoral Analysis For Turkey

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  • Nursel AYDINER-AVSAR
  • Özlem ONARAN

Abstract

The purpose of this paper is to test the effects of labor cost, openness, and demand side variables on employment for the case of Turkey using the panel data of private manufacturing industry at three digit level for 25 sectors for the period of 1973-2001. We use a seemingly unrelated regression (SUR) model, which allows for cross-sectoral heterogeneity. The estimation results show that higher growth is more effective in stimulating employment compared to lower labor costs. The reliance of Turkey and many developing countries on labor market flexibility and openness as the unique tools of employment policy reflects a pro-capital incomes policy bias rather than a necessity. The results confirm the Keynesian emphasis on demand-side policies to fight against unemployment.

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Bibliographic Info

Article provided by Institute of Developing Economies in its journal The Developing Economies.

Volume (Year): 48 (2010)
Issue (Month): 2 ()
Pages: 203-231

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Handle: RePEc:bla:deveco:v:48:y:2010:i:2:p:203-231

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References

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  1. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras," NBER Working Papers 5122, National Bureau of Economic Research, Inc.
  2. Robert A. Lawson & Edward Bierhanzl, 2004. "Labor Market Flexibility: An Index Approach to Cross-Country Comparisons," Journal of Labor Research, Transaction Publishers, vol. 25(1), pages 117-126, January.
  3. Erol Taymaz & Sule Ozler, 2004. "Labor Market Policies and EU Accession: Problems and Prospects for Turkey," ERC Working Papers 0405, ERC - Economic Research Center, Middle East Technical University, revised Mar 2004.
  4. Ozlem Onaran, 2002. "Measuring wage flexibility: the case of Turkey before and after structural adjustment," Applied Economics, Taylor & Francis Journals, vol. 34(6), pages 767-781.
  5. Ipek Ilkkaracan & Raziye Selim, 2003. "The role of unemployment in wage determination: further evidence on the wage curve from Turkey," Applied Economics, Taylor & Francis Journals, vol. 35(14), pages 1589-1598.
  6. Ann Harrison & Gordon Hanson, 1999. "Who Gains from Trade Reform? Some Remaining Puzzles," NBER Working Papers 6915, National Bureau of Economic Research, Inc.
  7. Özlem Onaran & Engelbert Stockhammer, 2006. "The effect of FDI and foreign trade on wages in the Central and Eastern European Countries in the post-transition era: A sectoral analysis," Department of Economics Working Papers wuwp094, Vienna University of Economics, Department of Economics.
  8. Erinç Yeldan & Ebru Voyvoda, 1999. "Patterns of Productivity Growth and the Wage Cycle in Turkish Manufacturing," Departmental Working Papers 9911, Bilkent University, Department of Economics.
  9. Guzin Erlat, 2000. "Measuring the impact of trade flows on employment in the Turkish manufacturing industry," Applied Economics, Taylor & Francis Journals, vol. 32(9), pages 1169-1180.
  10. Özlem Onaran & Engelbert Stockhammer, 2002. "Two Different Export-Oriented Growth Strategies under a Wage-led Accumulation Regime: à la Turca and à la South Korea," Working Papers wp38, Political Economy Research Institute, University of Massachusetts at Amherst.
  11. Ozlem Onaran, 2004. "Life After Crisis For Labor And Capital in the Era of Neoliberal Globalization," Working Papers geewp43, Vienna University of Economics Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
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Cited by:
  1. Djavad Salehi-Isfahani & Insan Tunali & Ragui Assaad, 2009. "A comparative study of returns to education of urban men in Egypt, Iran, and Turkey," Working Papers e07-17, Virginia Polytechnic Institute and State University, Department of Economics.
  2. Sahin, Afsin & Tansel, Aysit & Berument, Hakan, 2013. "Output-Employment Relationship across Sectors: A Long- versus Short-Run Perspective," IZA Discussion Papers 7599, Institute for the Study of Labor (IZA).
  3. Herr, Hansjörg & Sonat, Zeynep M, 2013. "Neoliberal unshared growth regime of Turkey in the post-2001 period," ILO Working Papers 484126, International Labour Organization.
  4. Luis N. Lanteri, 2013. "Determinantes económicos del nivel de empleo. Alguna evidencia para Argentina," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 73-100, May.
  5. Herr, Hansjörg & Sonat, Zeynep M., 2013. "Neoliberal Unshared Growth Regime of Turkey in the Post-2001 Period," EconStor Preprints 88606, ZBW - German National Library of Economics.

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