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The Relationship between Unemployment and Growth: Evidence from Turkish Manufacturing Industry

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  • Özge BARIŞ-TÜZEMEN
  • Samet TÜZEMEN

Abstract

The aim of the study is to examine the short and the long-run relationship between the unemployment and the manufacturing industry in Turkey for the period between 2005:Q and 2017:Q4. For this purpose, firstly the combined cointegration technique, which is developed by Bayer and Hanck (2012), is applied to reveal the long-run relationship. For the short run relationship, on the other hand, the symmetric and the asymmetric causal relationships among the variables are investigated using the Hacker and Hatemi-J (2006) and Hatemi-J (2012) methods. The findings show that the variables are not cointegrated. In other words, there is no long-run relationship between the unemployment rate and the manufacturing industry growth. According to the symmetric causality test of Hacker and HatemiJ (2006), no causality is detected. However, Hatemi-J (20012) asymmetric causality test suggests that there is only one unidirectional causality. The direction of the causality is from the negative shocks of the unemployment rate to the negative shocks of the manufacturing industry. The results support the jobless growth phenomenon for the manufacturing sector in Turkey.

Suggested Citation

  • Özge BARIŞ-TÜZEMEN & Samet TÜZEMEN, 2019. "The Relationship between Unemployment and Growth: Evidence from Turkish Manufacturing Industry," Sosyoekonomi Journal, Sosyoekonomi Society, issue 27(39).
  • Handle: RePEc:sos:sosjrn:190108
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    More about this item

    Keywords

    Unemployment; Manufacturing Industry; Combined Cointegration; Asymmetric Causality.;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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