IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

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

Author Info

Listed author(s):
  • Afsin Sahin

    ()

    (Department of Banking, School of Banking and Insurance, Gazi University)

  • Aysit Tansel

    ()

    (Cornell University, Middle East Technical University, Institute for the Study of Labor (IZA), and Economic Research Forum (ERF))

  • M. Hakan Berument

    ()

    (Bilkent University, Department of Economics)

Abstract

This paper investigates the nature of the output-employment relationship by using the Turkish quarterly data for the period from 1988 to 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. Thus, it seems that sustainable growth is an essential economic agenda for employment generation concerning the sectors and that there is a longrun link but weak short run link with demand.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/erf_wp_1311.pdf
Download Restriction: no

Paper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 1311.

as
in new window

Length: 33 pages
Date of creation: May 2013
Handle: RePEc:koc:wpaper:1311
Contact details of provider: Postal:
Rumelifeneri Yolu, Sarıyer, 34450 İstanbul

Phone: (90+212)-338-1302
Fax: (90+212)-338-1393
Web page: http://erf.ku.edu.tr
Email:


More information through EDIRC

Keywords: Health inputs; Output; Employment; Seasonal Cointegration.;

Other versions of this item:

Find related papers by JEL classification:
  • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
  • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
  • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Christian Weber, 1997. "The paper-bill spread and Blanchard's version of Okun's law," Applied Economics Letters, Taylor & Francis Journals, vol. 4(7), pages 437-440.
  2. repec:kap:iaecre:v:6:y:2000:i:3:p:557-570 is not listed on IDEAS
  3. M. Upender, 2011. "Differential Output Elasticity Of Employment During Post-Economic Reform Period In The Indian Economy," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 56(02), pages 189-202.
  4. Badi H. Baltagi & Yusuf Soner Baskaya & Timur Hulagu, 2013. "How different are the wage curves for formal and informal workers? Evidence from Turkey," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 271-283, 06.
  5. Bhalotra, Sonia R, 1998. "The Puzzle of Jobless Growth in Indian Manufacturing," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(1), pages 5-32, February.
  6. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
  7. Bell, David N F, 1981. "Regional Output: Employment and Unemployment Fluctuations," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 42-60, March.
  8. Erica L. Groshen & Simon M. Potter, 2003. "Has structural change contributed to a jobless recovery?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 9(Aug).
  9. Madden, G M & Tuckwell, R H, 1975. "The Output-Employment Relationship in Australian Industry," The Economic Record, The Economic Society of Australia, vol. 51(135), pages 321-327, September.
  10. Donald Freeman, 2000. "Regional tests of Okun's law," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(3), pages 557-570, August.
  11. Barbara Sawtelle, 2007. "Analyzing the Link Between Real GDP and Employment: An Industry Sector Approach," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 42(4), pages 46-54, October.
  12. David Shepherd & Robert Dixon, 2008. "The Cyclical Dynamics and Volatility of Australian Output and Employment," The Economic Record, The Economic Society of Australia, vol. 84(264), pages 34-49, 03.
  13. Hylleberg, S. & Engle, R. F. & Granger, C. W. J. & Yoo, B. S., 1990. "Seasonal integration and cointegration," Journal of Econometrics, Elsevier, vol. 44(1-2), pages 215-238.
  14. Martin Neil Baily & Robert Z. Lawrence, 2004. "What Happened to the Great U.S. Job Machine? The Role of Trade and Electronic Offshoring," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(2), pages 211-284.
  15. Kaufman, Roger T., 1988. "An international comparison of Okun's laws," Journal of Comparative Economics, Elsevier, vol. 12(2), pages 182-203, June.
  16. Özlem Onaran & Nursel Aydiner-Avsar, 2006. "The controversy over employment policy: Low labor costs and openness, or demand policy? A sectoral analysis for Turkey," Department of Economics Working Papers wuwp097, Vienna University of Economics and Business, Department of Economics.
  17. Prachowny, Martin F J, 1993. "Okun's Law: Theoretical Foundations and Revised Estimates," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 331-336, May.
  18. Shigeyuki Hamori & Akira Tokihisa, 2001. "Seasonal cointegration and the money demand function: some evidence from Japan," Applied Economics Letters, Taylor & Francis Journals, vol. 8(5), pages 305-310.
  19. George A. Akerlof, 2009. "How Human Psychology Drives the Economy and Why It Matters," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1175-1175.
  20. M. Hakan Berument & Nukhet Dogan & Aysit Tansel, 2009. "Macroeconomic Policy and Unemployment by Economic Activity: Evidence from Turkey," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 45(3), pages 21-34, May.
  21. Lai Yew Wah, 1997. "Employment effects of output and technological progress in Malaysian manufacturing," Journal of Development Studies, Taylor & Francis Journals, vol. 33(3), pages 411-420.
  22. Blanchard, Olivier Jean, 1989. "A Traditional Interpretation of Macroeconomic Fluctuations," American Economic Review, American Economic Association, vol. 79(5), pages 1146-1164, December.
  23. Hakan Berument & Nukhet Dogan & Aysit Tansel, 2004. "Economic Performance and Unemployment: Evidence from an Emerging Economy - Turkey," Working Papers 0409, Economic Research Forum, revised 01 Aug 2004.
  24. Hasan Dudu & Erol H. Cakmak, 2011. "Regional Impact of the Climate Change: A CGE Analysis for Turkey," Working Papers 644, Economic Research Forum, revised 10 Jan 2011.
  25. Morrison, C. J. & Berndt, E. R., 1981. "Short-run labor productivity in a dynamic model," Journal of Econometrics, Elsevier, vol. 16(3), pages 339-365, August.
  26. Moosa, Imad A., 1997. "A Cross-Country Comparison of Okun's Coefficient," Journal of Comparative Economics, Elsevier, vol. 24(3), pages 335-356, June.
  27. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-452, May.
  28. H. Bhorat & J. Hodge, 1999. "Decomposing Shifts in Labour Demand in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 67(3), pages 155-168, 09.
  29. Hamada, Koichi & Kurosaka, Yoshio, 1984. "The relationship between production and unemployment in Japan : Okun's law in comparative perspective," European Economic Review, Elsevier, vol. 25(1), pages 71-94, June.
  30. Ghysels, Eric & Perron, Pierre, 1993. "The effect of seasonal adjustment filters on tests for a unit root," Journal of Econometrics, Elsevier, vol. 55(1-2), pages 57-98.
  31. Nursel AYDINER-AVSAR & Özlem ONARAN, 2010. "The Determinants Of Employment: A Sectoral Analysis For Turkey," The Developing Economies, Institute of Developing Economies, vol. 48(2), pages 203-231.
  32. Verme, Paolo, 2006. "Constraints to growth and job creation in low-income Commonwealth of Independent States countries," Policy Research Working Paper Series 3893, The World Bank.
  33. Attfield, Clifford L. F. & Silverstone, Brian, 1998. "Okun's Law, Cointegration and Gap Variables," Journal of Macroeconomics, Elsevier, vol. 20(3), pages 625-637, July.
  34. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
  35. Willi Semmler & Jeff Madrick & Tarron Khemraj, 2006. "Okun's Law and Jobless Growth," SCEPA policy note series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 2006-03, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
  36. Alfons Palangkaraya & Jongsay Yong, 2011. "Trade Liberalisation, Exit, and Output and Employment Adjustments of Australian Manufacturing Establishments," The World Economy, Wiley Blackwell, vol. 34(1), pages 1-22, 01.
  37. Deepankar Basu & Duncan K. Foley, 2013. "Dynamics of output and employment in the US economy," Cambridge Journal of Economics, Oxford University Press, vol. 37(5), pages 1077-1106.
  38. Michael Chletsos & Christos Kollias, 1997. "The Effects of Macroeconomic Aggregates on Employment Levels in Greece: A Causal Analysis," LABOUR, CEIS, vol. 11(3), pages 437-448, November.
  39. F. P. R. Brechling, 1965. "The Relationship between Output and Employment in British Manufacturing Industries," Review of Economic Studies, Oxford University Press, vol. 32(3), pages 187-216.
  40. Litterman, Robert B, 1983. "A Random Walk, Markov Model for the Distribution of Time Series," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 169-173, April.
  41. Dong He & Zhiwei Zhang & Wenlang Zhang, 2009. "How Large Will Be The Effect Of China'S Fiscal Stimulus Package On Output And Employment?," Pacific Economic Review, Wiley Blackwell, vol. 14(5), pages 730-744, December.
  42. R. A. Hart & T. Sharot, 1978. "The Short-run Demand for Workers and Hours: A Recursive Model," Review of Economic Studies, Oxford University Press, vol. 45(2), pages 299-309.
  43. Jaakko Pehkonen, 2000. "Employment, unemployment and output growth in booms and recessions: time series evidence from Finland, 1970-1996," Applied Economics, Taylor & Francis Journals, vol. 32(7), pages 885-900.
  44. Kuznets, Simon, 1973. "Modern Economic Growth: Findings and Reflections," American Economic Review, American Economic Association, vol. 63(3), pages 247-258, June.
  45. Litterman, Robert B, 1983. "A Random Walk, Markov Model for the Distribution of Time Series," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 169-173, April.
  46. Holmes, Mark J. & Silverstone, Brian, 2006. "Okun's law, asymmetries and jobless recoveries in the United States: A Markov-switching approach," Economics Letters, Elsevier, vol. 92(2), pages 293-299, August.
  47. N. J. Ireland & D. J. Smyth, 1970. "The Specification of Short-Run Employment Models," Review of Economic Studies, Oxford University Press, vol. 37(2), pages 281-285.
  48. Leopold Sogner & Alfred Stiassny, 2002. "An analysis on the structural stability of Okun's law--a cross-country study," Applied Economics, Taylor & Francis Journals, vol. 34(14), pages 1775-1787.
  49. Villaverde, José & Maza, Adolfo, 2009. "The robustness of Okun's law in Spain, 1980-2004: Regional evidence," Journal of Policy Modeling, Elsevier, vol. 31(2), pages 289-297.
  50. Engle, Robert F. & Yoo, Byung Sam, 1987. "Forecasting and testing in co-integrated systems," Journal of Econometrics, Elsevier, vol. 35(1), pages 143-159, May.
  51. Ajit Singh & Sukti Dasgupta, 2005. "Will services be the new engine of economic growth in India?," Working Papers wp310, Centre for Business Research, University of Cambridge.
  52. Costas Milas, 2000. "Employment, output and political business cycle effects in the Greek non-tradable sector," Applied Economics, Taylor & Francis Journals, vol. 32(2), pages 123-133.
Full references (including those not matched with items on IDEAS)

The CitEc project has not yet found citations to this item.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Access and download statistics

When requesting a correction, please mention this item's handle: RePEc:koc:wpaper:1311. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sumru Oz)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.