Indicators of informal employment in Turkey: theory and practices

This study is aimed to make both theoretical and empirical assessment of informal employment, which is part of the informal economy in Turkey. For this purpose, in order to determine macroeconomic determinants of unregistered employment, variables such as unregistered employment, GDP, unemployment, consumer price index and tax revenues as of 2006-2018 period were used. Long and short term dynamics between the variables were determined by using ARDL boundary test. The findings show that there is a long term relationship between the series. In addition, all long-term coefficients were statistically significant at 1%, and the coefficients showing the significant effect of unemployment rate, consumer price index and tax revenues on informal employment were positively obtained. On the other hand, the coefficient of economic growth variable showing the effect on informal employment was found to be negative. As a result of the error correction model based on the ARDL model, it was determined that the short-term deviation in unregistered employment would converge to the equilibrium point by showing oscillations on the balance rather than directly in the long term.