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Output-Employment Relationship across Sectors: A Long- versus Short-Run Perspective

  • Sahin, Afsin

    ()

    (Gazi University)

  • Tansel, Aysit

    ()

    (Middle East Technical University)

  • Berument, Hakan

    ()

    (Bilkent University)

This paper investigates the nature of the output-employment relationship by using the Turkish quarterly data for the period 1988-2008. Even if we fail to find a long-run relationship between aggregate output and total employment, there are long-run relationships for the aggregate output with non-agricultural employment and sectoral employment levels for seven of nine sectors that we consider. However, a further investigation for the output and employment relationship within a short-run perspective do not reveal statistically significant relationships for either total employment, or non-agriculture employment or the eight out of the nine sectors that we consider. Although there are various long-run relationships between output and employment, the short-run links between demand and employment are weak. The various implications of this for the economy and the labor market are discussed. As a result, maintaining high levels of output in the long-run creating the demand is essential for employment generation.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7599.

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Length: 33 pages
Date of creation: Aug 2013
Date of revision:
Publication status: published in: Macroeconomics and Finance in Emerging Market Economies, 2013, 2, 1-23.
Handle: RePEc:iza:izadps:dp7599
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