Dynamics of jobless growth: The case of Turkey

The first basic study on economic growth and unemployment belongs to Arthur Okun (1962). Okun, the relationship between economic growth and unemployment is the same in both periods of recession and expansion. But in recent years, unemployment levels have not declined to the desired level, although economic growth has been observed both in the world and in the Turkish economy. In studies conducted, it has been found that this situation differs during the expansion and contraction periods of the economy. This situation led to the introduction of the concept of " jobless recovery-jobless growth" in the literature. For this reason, probable causes of growth that do not create employment, which is one of the macroeconomic problems of both the world economies and the Turkish economy, have been researched for certain periods. The presence of jobless growth in Turkey's economy in 2005:I-2017:I period was tested with GDP and unemployment data. In the study, the stability of the time series was first investigated by ADF (1979), unit root test. The series are then trend-free using the HP (1997) filter. Then, the cointegration relation between the variables was analyzed by the Boundary Test approach developed by Pesaran, Shin and Smith (2001). The existence of cointegration among the mentioned series was not found. The ARDL model is then developed to identify long and short cycle relationships between the series. As a result of the model, the existence of a long or short rotational relationship between the series could not be determined. This suggests that the increase or decrease in economic growth does not affect unemployment rates. However, according to Okun (1962), an increase in economic growth is required to reduce unemployment rates. In this context, the existence of jobless growth in Turkey's economy is concerned. Key words: Okun Law, Economic Growth, Unemployment and Jobless Recovery-Jobless Growth