The Beveridge curve and labour market dynamics in Turkey


Saglam B., GÜNALP B.

APPLIED ECONOMICS, vol.44, no.24, pp.3195-3202, 2012 (Peer-Reviewed Journal) identifier identifier

  • Publication Type: Article / Article
  • Volume: 44 Issue: 24
  • Publication Date: 2012
  • Doi Number: 10.1080/00036846.2011.570725
  • Journal Name: APPLIED ECONOMICS
  • Journal Indexes: Social Sciences Citation Index, Scopus
  • Page Numbers: pp.3195-3202
  • Keywords: Beveridge curve, unemployment, vacancies, UNFILLED VACANCIES, GREAT-BRITAIN, TIME-SERIES, UNEMPLOYMENT, EMPLOYMENT, BEHAVIOR

Abstract

This article investigates the dynamics of unemployment and vacancy rates in Turkey during the period 1951 to 2008 by means of a Beveridge Curve (BC). The time-series analysis of unemployment and vacancies as well as two other relevant labour market variables, real wages and real labour productivity, strongly suggests inefficiency in the Turkish labour market. A stable long-run relationship between unemployment rate and vacancy rate is found for Turkey, that is, the existence of a negatively sloped BC is verified. The estimated Turkish BC reflects the structural problems and lack of flexibility in the labour market. The modified BC with real wages and labour productivity reveals that labour productivity has no significant effect on unemployment rate whereas wages have positive and significant effects on the same variable.