The factors affecting in the industrial sector employment and the causality relationship between them in Turkey

Importance of unemployment and employment for developed and developing countries still exists and has been increasing. Economists accept that unemployment is not only an economic problem. Structural change still continues in Turkish economy. Increase in industry sector employment is limited. Industry sector is important to be able to make production and exports that have high added value. In order to find what type of variables affect the indsutry sector employment in Turkey, GDP, productivity, wages and current account deficit variables are examined by using Granger causality and Toda-Yamamoto method. According to Granger causality test's result, there is a two-way relation that goes from employment to GDP, productivity and current account deficit. While there is an one-way realtion from employment to wages, wages do not affect employment. If we look at the results from the Toda-Yamamoto long-run causality analysis, GDP and productivity cause employment, but there is no long-run relation between wages and employment. Key words: Employment, unemployment, industry, causality, ADF Test