The education-employment relationship and youth unemployment problem in Turkey

Youth unemployment, particularly, the problem of educated youth unemployment is one of the most important macroeconomic problems of today. While qualified workforce has become the most important element of economic development with globalization, the education system has been given the responsibility of raising a demanded workforce. The relationship between education and employment was formed within the framework of the Human Capital Theory in the 1960s. According to the theory, an increase in the level of education is expected to reduce unemployment and facilitate employment. However, it is seen that the increase in the level of education in some countries cannot reduce unemployment rate today. This situation makes the relationship between education and employment controversial, and it is necessary to identify it in case of any problem. In this study including the period of 1988-2020 in Turkey, the main macroeconomic indicators that are thought to affect youth unemployment and the relationship between higher education and youth unemployment were examined through the ARDL bound test. As a result of econometric analyses, a positive relationship was found between higher education gross enrolment rate, the share of higher education expenditures in GDP, and real economic growth and youth unemployment. While a negative relationship was found between youth unemployment and youth labour force participation rate and openness, there was no significant relationship between inflation and youth unemployment. Keywords: Youth Unemployment, Higher Education, ARDL bound test