An econometric model study on the economic determinants of youth unemployment at the regional level in Turkey

The employment structure of the country's economies and the size of the unemployment figures are accepted as an important indicator of the development and social improvement levels of the economies. Regardless of their level of development, even if the reason for unemployment differs from country to country, the phenomenon continues to be at the center of economic and political debates. Youth unemployment can be caused by both the general problems brought by the age of globalization, information and technology, and the problems created by the internal dynamics of the labor market. Starting from this point, in this study, youth unemployment within the scope of NUTS-2 region was modeled with panel data analysis. In the study, youth unemployment rate included as dependent variable, real GDP included as independent variable, inflation rate, share of fixed capital investments in GDP and share of young workforce in total workforce are included in the model as explanatory variables. The data set of the study consists of data for the years 2004-2019 at the NUTS-2 level, and the data were obtained from the Regional Statistics of the Turkish Statistical Institute (TUIK). In this study, it's aimed to determine, the existence and direction of an inverse relationship between real GDP and unemployment based on Okun's Law (1962) and the existence and direction of an inverse relationship between inflation and unemployment in the short run according to the Phillips curve, which reveals the relationship between inflation and unemployment. In addition, the existence and direction of the increase in fixed investments in Harrod-Domar growth models, the effect of reducing youth unemployment rates through production, and finally, the existence and direction of the relationship between the share of young labor force in the labor force and youth unemployment were aimed to determine. According to the results obtained, it was concluded that Okun's law is not valid in the short run in Turkey, that there is no inverse relationship between inflation and unemployment in the short run according to the Phillips curve, and that the increase in the share of the young workforce in the workforce further increases youth unemployment. According to the findings, it has been determined that only the Harrod-Domar growth models have a negative effect of the increase in fixed investments on the youth unemployment rate through production, and the direction is expected to be negative in accordance with the theory.