The effect of economic growth, inflation and higher education on youth unemployment in Türkiye: A regional analysis

Unemployment remains one of the most fundamental macroeconomic issues faced by both developed and developing countries these days. Especially the increase in unemployment rates among the young population observed in recent years has made the economic, social, and political dimensions of this issue more visible. The high rate of youth unemployment is not limited to individual income loss or economic inefficiency; it also negatively affects social welfare and long-term development. Therefore, identifying the causes of youth unemployment and developing effective policy recommendations in this regard is of great importance. The annual data used in the study is obtained from the Turkish Statistical Institute [TÜİK] database and covers the period of 2005-2021 for 26 regions classified under Level II of Turkey's Statistical Regional Units Classification (SRUC). The relationship between youth unemployment rate and economic growth, inflation, and higher education participation is analyzed in this context. In order to reveal how youth unemployment is shaped at the regional level and which macroeconomic factors it is influenced by, the dynamic panel data analysis method has been preferred. This method allows for obtaining more consistent and reliable results by taking into account both the time dimension and regional differences. The empirical findings obtained in the study indicate that the youth unemployment rate, along with the previous period's value, and the economic growth are statistically significant and consistent with theoretical expectations in explaining youth unemployment. However, no statistically significant relationship has been found between youth inflation, the education participation and unemployment. This situation suggests that the impact of these variables on explaining youth unemployment may be limited, or that different mechanisms play role at the regional level. Study provides significant findings in understanding the structural dynamics of youth unemployment and contributing to the regional-level policy development process.