AN ECONOMETRIC ANALYSIS OF RELATIONSHIP BETWEEN REAL WAGES AND EMPLOYMENT

Erkan Ozata and Ethem Esen ()
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Ethem Esen: Anadolu University

Anadolu University Journal of Social Sciences, 2010, vol. 10, issue 2, 55-70

Abstract: The relationship between real wages and employment has long been the controversial issue in economic theory. In this respect this study investigates the existence and the direction of a long-run relationship between real wages and employment level. For this purpose, cointegration and causality tests are applied to quarterly data from 1988:1 to 2008:4 of Turkish private manufacturing industry. The results indicate the existence of a long-run relationship between real wages and employment level. When the direction of this relationship is analyzed, obtained results support the view of Neo-classical economists. According to this, a reduction in real wages will increase the employment level.

Keywords: Employment; Real wages; Zivot Andrews Test; Cointegration; Causality. (search for similar items in EconPapers)
JEL-codes: C01 J01 J30 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:and:journl:v:10:y:2010:i:2:p:55-70

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