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Openness to Trade and Structural Changes in the Sources of Economic Growth and Labour Demand in Turkey


  • Guncavdi, Oner
  • Kucukcifci, Suat


The Turkish economy has undergone drastic structural changes since 1980. While the effects of the Turkish adjustment programme have drawn considerable attention, a few studies have investigated its employment impacts. Unlike neoclassical expectation behind the structural adjustment programme, some studies for Turkey have showed that this policy change in 1980 caused a decline in employment. Results show that the Turkish industrialisation strategy cannot be regarded as export-led industrialisation strategy. Extra output created by exports has been very limited during the post-liberalisation period. However domestic final demand has continued to be the most dominant determinant of output growth. A Surprising result of the paper appears for the period of 1985-1990 when import substitution in final demand created output growth particularly in technology-intensive manufacturing and other manufacturing sectors. However import penetration in final and intermediate goods overwhelmingly important factors creating de-industrialisation in the period of 1990-1996. This paper, however, examines the sources of changes in employment. Despite neoclassical expectations, the reform period after 1982 witnessed large factor substitution against labour, even in the tradable goods sector. Additionally, labour demand also appears to response to output growth less in the post-liberalisation period than before.

Suggested Citation

  • Guncavdi, Oner & Kucukcifci, Suat, 2008. "Openness to Trade and Structural Changes in the Sources of Economic Growth and Labour Demand in Turkey," MPRA Paper 9624, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:9624

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    References listed on IDEAS

    1. Martin, John P & Evans, John M, 1981. "Notes on Measuring the Employment Displacement Effects of Trade by the Accounting Procedure," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 154-164, March.
    2. Yeldan, A.E., 2000. "The Impact of Financial Liberalization and the Rise of Financial Rents on Income Inequality: The Case of Turkey," Research Paper 206, World Institute for Development Economics Research.
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    Cited by:

    1. Basak Bayramoglu & Jean-Fran├žois Jacques, 2012. "Fishery Resources and Trade Openness: Evidence from Turkey," Working Papers 2012/02, INRA, Economie Publique.
    2. Basak BAYRAMOGLU & Jean-Fran├žois JACQUES, 2014. "The consequences of trade openness on the availability of seafood resources: Methodology and evidence based in the case of Turkey," FOODSECURE Working papers 16, LEI Wageningen UR.

    More about this item


    Structural changes; employment; input-output; trade reform; Turkey;

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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