Labour Market Indicators in Turkey: Regional Potentials and Challenges

Abstract

Turkey as a developing country has long been suffering from regional discrepancies in employment. This unequal pattern went hand in hand with shifts in types of labour in favour of wage and salaried jobs as opposed to the self-employment and unpaid family work. This chapter is an attempt to disclose the potentials and problems of the labour market in Turkey by using a quantitative approach. First, main labour market indicators in Turkey are discussed at both national and regional level. The descriptive analysis implies that gender differentials in the employment rates remained as an issue albeit certain improvements in female labour force participation rates; and the majority of employed population still has less than high school diploma. Second, the changes in employment statuses are examined in relation to their education and gender characteristics by employing spatial panel data models. The maximum likelihood estimation results imply that wage earners and unpaid family workers in a given region are positively affected by neighbouring regions, unlike self-employment which tends to be an independent decision. Moreover, the effect of lower levels of education is drastic for unpaid family work and quite significant for self-employment. Female employment is still positively and largely correlated with unpaid family work whereas it has an inverse relationship with wage and salaried jobs. Overall, the results indicate that there is much progress to be made which calls for more structural transformations to solve the chronical issues inherent in the labour market of Turkey.