The impact of institutional change on employment: An application on institutional economics approach to the European Union

The industrial revolution and after experienced technological developments, the facts of expansion of the trade and rapid population growth have led Europe and Turkey to put the problem of unemployment on the agenda as well as many developed and developing countries. Many economic movements has done scientific studies for the solution of the unemployment problem. Institutional economics, emphasizing the institution concept, has suggested that the changes in corporate structures and labor markets be regulated. In the study done by the use of providences of institutional economics, panel data analysis has been used. In the analysis, which the unemployment has been tested as an independent variable, three macro economic and five institutional variables impacts on unemployment, which were determined by the institutional point of view, have been tried to be measured. In the study, the data related to twenty two European countries and Turkey which were chosen for 2003-2013 period has been used. According to the results of the analysis, it's been found out that some variables of the impact of unemployment are statistically significant, on the other hand, others doesn't make any meaningful relation. However, institutional interaction has changed the output. Keywords: Institutional economics, unemployment, European Union, panel data analysis, intstitutional changes.