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Job creation and job destruction in Turkey: 2006–2021

Author

Listed:
  • Sinem Ayhan

    (Leibniz-Institute for East and Southeast European Studies (IOS) & IZA)

  • Hartmut Lehmann

    (Leibniz-Institute for East and Southeast European Studies (IOS), University of Regensburg & IZA)

  • Selin Pelek

    (Leibniz-Institute for East and Southeast European Studies (IOS), University of Regensburg & IZA)

Abstract

This paper examines the dynamics of Turkey’s labor market using job flow analysis. We analyze administrative data from 2006 to 2021, encompassing all non-financial firms and their employees registered with social security institutions, to examine employment dynamics during various periods, including significant shocks like the 2008 global recession, the local currency collapse in late 2018, and the first two years of the COVID-19 pandemic. We examine how an extended set of firm characteristics influences employment structure dynamics. Turkey’s labor market is highly dynamic, with job reallocation rates ranging from 34% to 44%, surpassing Anglo-Saxon nations and significantly exceeding transition countries, but having similar rates of developing countries. High excess job reallocation rates reveal substantial and genuine job structure changes in Turkey, especially notable in the construction sector, where job creation persistence is remarkably low. Micro firms (up to 10 employees) dominate job creation and destruction, with declining job flow rates as firms grow larger or older. Low-tech industries in manufacturing display a similar pattern, contributing significantly to job creation and destruction. Firms strongly engaged in imports and/or exports also contribute more to job creation and job destruction compared to those with low exposure to international trade.

Suggested Citation

  • Sinem Ayhan & Hartmut Lehmann & Selin Pelek, 2023. "Job creation and job destruction in Turkey: 2006–2021," Working Papers 402, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    • Handle: RePEc:ost:wpaper:402
    as

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    File URL: https://www.dokumente.ios-regensburg.de/publikationen/wp/wp_402.pdf
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    References listed on IDEAS

    as
    1. Jozef Konings & Olga Kupets & Hartmut Lehmann, 2002. "Gross Job Flows in Ukraine: Size, Ownership and Trade Effects," William Davidson Institute Working Papers Series 521, William Davidson Institute at the University of Michigan.
    2. Martina Lawless, 2014. "Age or size? Contributions to job creation," Small Business Economics, Springer, vol. 42(4), pages 815-830, April.
    3. Haltiwanger, John & Scarpetta, Stefano & Schweiger, Helena, 2014. "Cross country differences in job reallocation: The role of industry, firm size and regulations," Labour Economics, Elsevier, vol. 26(C), pages 11-25.
    4. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 819-863.
    5. Jozef Konings & Olga Kupets & Hartmut Lehmann, 2003. "Gross job flows in Ukraine," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 321-356, June.
    6. Gerrit Wit & Jan Kok, 2014. "Do small businesses create more jobs? New evidence for Europe," Small Business Economics, Springer, vol. 42(2), pages 283-295, February.
    7. repec:bla:etrans:v:11:y:2003-06:i:2:p:321-356 is not listed on IDEAS
    8. Sıdıka Başçı & Aysegül Durucan, 2017. "A Review of Small and Medium Sized Enterprises (SMEs) in Turkey," Yildiz Social Science Review, Yildiz Technical University, vol. 3(1), pages 59-80.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Job creation; job destruction; firm characteristics; administrative data; Turkey;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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