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Long Memory in Turkish Unemployment Rates

Author

Listed:
  • Luis A. Gil-Alana

    () (University of Navarra, Faculty of Economics and ICS, Pamplona, Spain)

  • Zeynel Abidin Ozdemir

    (Department of Economics, Gazi University, Economic Research Forum (ERF) Cairo)

  • Aysit Tansel

    (Middle East Technical University,IZA, Economic Research Forum (ERF) Cairo)

Abstract

In this paper we have examined the unemployment rate series in Turkey by using long memory models and in particular employing fractionally integrated techniques. Our results suggest that unemployment in Turkey is highly persistent, with orders of integration equal to or higher than 1 in most cases. This implies lack of mean reversion and permanence of the shocks. We found evidence in favor of mean reversion in the case of female unemployment and this happens for all the groups of non-agricultural, rural, urban and youth unemployment series. The possibility of non-linearities are observed only in the case of female unemployment and the degree of persistence is higher in the cases of female and youth unemployment series. Important policy implications emerge from our empirical results. Labor and macroeconomic policies will most likely have long lasting effects on the unemployment rates.

Suggested Citation

  • Luis A. Gil-Alana & Zeynel Abidin Ozdemir & Aysit Tansel, 2017. "Long Memory in Turkish Unemployment Rates," Koç University-TUSIAD Economic Research Forum Working Papers 1715, Koc University-TUSIAD Economic Research Forum.
  • Handle: RePEc:koc:wpaper:1715
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Unemployment; hysteresis; NAIRU; fractional integration; Turkey.;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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