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A note on the intertemporal labor dynamics in Turkey

Author

Listed:
  • Serdar Selçuk

    (Boğaziçi University, Department of Economics)

  • Orhan Torul

    (Boğaziçi University, Department of Economics)

Abstract

In this paper, we investigate the nature of the negative relationship between the unemployment rate and the labor force participation rate in Turkey. We report that the discouraged unemployed worker phenomenon is not the main driving force behind the documented negative co-movement. We show that the negative relationship can be explained instead by 1) the simultaneous inflow of workers to the employed state from the inactive and unemployed states when the unemployment rate decreases, and 2) the simultaneous outflow of workers from the employed state to the inactive and the unemployed states when the unemployment rate increases. We also report that empirical intertemporal labor market transitions of couples do not provide evidence for within-household risk sharing in Turkey.

Suggested Citation

  • Serdar Selçuk & Orhan Torul, 2016. "A note on the intertemporal labor dynamics in Turkey," Economics Bulletin, AccessEcon, vol. 36(4), pages 2063-2079.
    • Handle: RePEc:ebl:ecbull:eb-16-00076
    as

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    References listed on IDEAS

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    1. Gary Solon & Ryan Michaels & Michael W. L. Elsby, 2009. "The Ins and Outs of Cyclical Unemployment," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 84-110, January.
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    3. Gonul Sengul, 2014. "Ins and Outs of Unemployment in Turkey," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 50(3), pages 28-44, May.
    4. Stephen T. Marston, 1976. "Employment Instability and High Unemployment Rates," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(1), pages 169-210.
    5. Robert Shimer, 2012. "Reassessing the Ins and Outs of Unemployment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 127-148, April.
    6. Andreas Hornstein, 2013. "Why Labor Force Participation (Usually) Increases when Unemployment Declines," Economic Quarterly, Federal Reserve Bank of Richmond, issue 1Q, pages 1-23.
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    More about this item

    Keywords

    Labor Market; Unemployment; Labor force participation; Labor market transitions; within-household risk sharing;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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