REGIONAL UNEMPLOYMENT DYNAMICS IN TURKEY

Hasan ENGIN DURAN

Izmir Institute of Technology, City and Regional Planning Department, Associate Professor of Economics, Gülbahce Kampüsü, Izmir Yüksek Teknoloji Ensitüsü, Mimarlık Fakültesi, Şehir ve bölge Planlama Bölümü, Urla-Izmir,  Tel: +90 232 750 70 66

enginduran@iyte.edu.tr

Abstract

Aim of the study is to investigate region specific causes of unemployment for Turkish 26 Nuts-2 regions between 2004-2017. We aim at contributing to the literature by analyzing (i) whether regional unemployment and sub-groups (with respect to gender, age, education) is driven by excessive labor supply or shortage of labor demand, (ii) which sub-groups have higher unemployment in regions. In terms of methodology, we employ descriptive and exploratory analyses, spatial tests and panel regressions. Our findings indicate three main results: First, there is a sizable difference in unemployment rates across regions and the dispersion is getting stronger over time. Second, there are extremely low and high unemployment rates in various sub-groups and regions. Third, changes in unemployment is mostly driven by changes in labor supply rather than demand. Among the 208 cases (26 regions x 8 sub-groups), in 154 cases, the major driver of unemployment is the excessive labor supply.

Keywords: Regional Unemployment, Labor Supply, Panel Data Regression

JEL classification: R11, R23, R12
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