OUTPUT–EMPLOYMENT RELATIONSHIP ACROSS SECTORS: A LONG‐ VERSUS SHORT‐RUN PERSPECTIVE |
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| Authors: | Afşin Şahin Aysit Tansel M Hakan Berument |
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| Affiliation: | 1. Department of Banking, School of Banking and Insurance, Gazi University, Ankara, Turkey;2. Cornell University, Ithaca, New York, USA;3. Department of Economics, Middle East Technical University, Ankara, Turkey;4. Institute for the Study of Labor (IZA), Bonn, Germany;5. Economic Research Forum (ERF), Cairo, Egypt;6. Department of Economics, Bilkent University, Ankara, Turkey |
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| Abstract: | This paper investigates the nature of the output–employment relationship by using the Turkish quarterly data for the period 1988–2008. Even if we fail to find a long‐run relationship between aggregate output and total employment, there are long‐run relationships for the aggregate output with non‐agricultural employment and sectoral employment levels for seven of nine sectors that we consider. However, a further investigation for the output and employment relationship within a short‐run perspective does not reveal statistically significant relationships for either total employment or non‐agriculture employment, or eight of the nine sectors that we consider. Although there are various long‐run relationships between output and employment, the short‐run links between demand and employment are weak. The various implications of this for the economy and the labour market are discussed. As a result, maintaining high levels of output in the long‐run creating demand is essential for employment generation. |
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| Keywords: | employment output seasonal cointegration C32 E24 E32 |
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