Do age and gender matter for unemployment hysteria in Turkiye? Evidence from wavelet-based unit root tests

The main objective of the study is to investigate whether shocks in the Turkish economy have a hysteria effect on unemployment. For this purpose, the unemployment hysteria test is conducted by using monthly data for the period 2005-2023 with the rates of general (total) unemployment, female unemployment, male unemployment, youth unemployment, young female unemployment, young male unemployment, adult unemployment, adult female unemployment and adult male unemployment. The effect of hysteria is investigated for short, medium and long term components by performing wavelet transforms with the original values of unemployment rates. Firstly, the linearity of the series and the significance of structural breaks are tested. Fourier Generalised Dickey-Fuller (FADF) unit root test analysis is performed for linear series with significant structural breaks, and Fourier Kapetanios-Shin-Snelltest (FKSS) unit root test analysis is performed for non-linear series with significant structural breaks. In the absence of significant structural breaks in the variables, Generalised Dickey-Fuller (ADF) unit root test analysis was applied to linear series and Kapetanios-Shin-Snelltest (KSS) unit root test analysis was applied to non-linear series. According to the results obtained, unemployment hysteresis was found in the original unemployment series for female unemployment, youth unemployment, young female unemployment, adult unemployment and adult male unemployment variables. In the short-run components obtained from the wavelet transform, it is concluded that the hysteresis is valid only for the adult male unemployment rate. In the analyses for the medium-term components, the unemployment hysteresis hypothesis is not valid for any unemployment rate. In the long run, unemployment hysteria was found for general unemployment, female unemployment, male unemployment, young female unemployment and young male unemployment rates. The study is concluded by evaluating the findings obtained and making political and economic inferences.