Openness to trade and structural changes in the sources of economic growth and labour demand in Turkey

Oner Guncavdi () and Suat Kucukciftci
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Oner Guncavdi: Istanbul Technical University
Suat Kucukciftci: Istanbul Technical University

EconoQuantum, Revista de Economia y Finanzas, 2011, vol. 8, issue 1, 7-34

Abstract: Unlike neoclassical expectation behind the structural adjustment programme, some studies for Turkey have showed that the policy change in 1980 caused a decline in employment. Results show that the Turkish industrialisation strategy cannot be regarded as export-led industrialisation strategy. Extra output created by exports has been very limited during the post-liberalisation period. However domestic final demand has continued to be the most dominant determinant of output growth. A surprising result of the paper appears for the period of 1985-1990 when import substitution in final demand created output growth particularly in technology-intensive manufacturing and other manufacturing sectors. However import penetration in final and intermediate goods are important factors creating de-industrialisation in the period of 1990-1996. Despite neoclassical expectations, the reform period after 1982 witnessed large factor substitution against labour, even in the tradable goods sector. Additionally, labour demand also appears to response to output growth less in the post-liberalisation period than before.

Keywords: Structural changes; employment; input-output; trade reform; Turkey. (search for similar items in EconPapers)
JEL-codes: D57 F14 O16 R15 (search for similar items in EconPapers)
Date: 2011
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