Effect of the liberalisation of international trade on distributive relations

Effects of the liberalization of international trade on labor market are the primary interesting subjects in the economic literature. Liberalization of trade has always influenced labor markets, either positive or negative. Along with technological changes capital has been mobile and production has gained the ability to move rapidly into other countries, changes have been occurred in industrial structure, flexible production manner has been prevalent, labor market has been stratified, knowledge itself has begun to be seen as a new production factor and the concept of knowledge employee has come to the fore. Studies on this subject are rather based on the Theory of Factor Endowment and the Theory of Stolper-Samuelson Income Distribution, which emerged from former theory. According to the Theory of Stolper-Samuelson Income Distribution, along with the liberalization of foreign trade, demand on prevalent production factor in countries and price of this factor increase, demand on rare production factor and price of this factor decrease. In consequence of this process, income inequalities in the country improve. When we look at Turkey, along with the liberalization of foreign trade it is expected that demand on prevalent labor factor and wages increase and unemployment decreases. In this study, effect of the liberalization of international trade on labor market has been tried to examine through the help of Turkey's periodical Beveridge Curve covering 1989-2013, which shows the negative relation between vacancy and unemployment. According to the analysis results, during the first years that foreign trade has been liberalized, unemployment rates have been relatively low and vacancy have a movement in increasing and decreasing. As of these years up to 2000 in general, labor market has been left to 45° line, which is vacancy are greater than unemployment rates. After 2000, in especially crisis years, it has been right to 45° line, which is unemployment rates are greater than vacancy. In recent years, since labor market is again left to 45° line, we can say that there is a process of economic recovery. However, although vacancy are greater than unemployment rates in recent years, especially after 2008 vacancy and unemployment rates occasionally have increased altogether, Beveridge curve has moved away from origin and incompatible matches in labor market have increased. Structural problems and crises of labor markets have rather influence on the increase of incompatible matches, after crises Beveridge curve has tend to be counterclockwise in accordance with the literature.