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A note on the intertemporal labor dynamics in Turkey

Serdar Selçuk () and Orhan Torul ()
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Serdar Selçuk: Boğaziçi University, Department of Economics

Economics Bulletin, 2016, vol. 36, issue 4, 2063-2079

Abstract: In this paper, we investigate the nature of the negative relationship between the unemployment rate and the labor force participation rate in Turkey. We report that the discouraged unemployed worker phenomenon is not the main driving force behind the documented negative co-movement. We show that the negative relationship can be explained instead by 1) the simultaneous inflow of workers to the employed state from the inactive and unemployed states when the unemployment rate decreases, and 2) the simultaneous outflow of workers from the employed state to the inactive and the unemployed states when the unemployment rate increases. We also report that empirical intertemporal labor market transitions of couples do not provide evidence for within-household risk sharing in Turkey.

Keywords: Labor Market; Unemployment; Labor force participation; Labor market transitions; within-household risk sharing (search for similar items in EconPapers)
JEL-codes: E2 J4 (search for similar items in EconPapers)
Date: 2016-11-09
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