Abstract
This study investigates the trends of and factors behind discouraged workers in Turkey during the period 1988-2014. According to ILO (1982), discouraged workers are those who wanted to work, but are not employed, and not job seekers anymore because they believe there is no work available for them. In this paper, it is put forward that the number of discouraged workers in Turkey cannot be ignored. Using data from Turkstat, World Development Indicators, and Turkish Ministry of Development, locally weighted (LOESS) regressions are estimated for the possible determinants of discouragement. The results demonstrate that discouragement increases rapidly after a certain per capita income threshold is reached. Besides, as unemployment increases, people are more eager to become discouraged, which is an expected relationship. Surprisingly, in the recent period of increasing employment, a rise both in the number and share of discouraged workers is detected in Turkey. The crisis years (especially 2001) seriously accelerated discouragement at higher secondary and tertiary school enrolment rates. Furthermore, discouraged workers increased gradually as services value added share increased, whereas industrial and agricultural value added shrank. Urbanization also triggers discouragement. These findings are expected to have important policy implications for Turkey, which tackles with significant issues regarding unemployment levels and human capital development.
Highlights
This article intends to investigate the problem of discouraged workers in the Turkish labor market, which has evolved as an issue to struggle against as far as the high unemployment rate in the country is concerned
Lee & Parasnis (2014) examine that the changes in unemployment rates might have different consequences, leading to either the added worker effect or the discouraged worker effect. They investigate the discrepancy between labor force participation rate and unemployment rate using panel data of developing countries and OECD countries and show that discouraged worker effect influences developed countries, while the added worker effect dominates developing countries causing an increase in the labor force
I have a sample of 27 observations on the variables y, which is the discouragement rate defined as the number of discouraged workers divided by the labor force) and x, which consists of a number of individual factors that might determine discouragement
Summary
This article intends to investigate the problem of discouraged workers in the Turkish labor market, which has evolved as an issue to struggle against as far as the high unemployment rate in the country is concerned. This paper aims to answer several questions from a macroeconomic perspective in order to understand the conditions and factors behind discouragement Among these main questions are “what are the levels and rates of discouragement in Turkey and where do the stand among other countries?”, “why has discouragement increased?” and “what are the main reasons of increasing discouragement?” This article seeks to answer these questions using data from Turkstat and other relevant data sources and tries to explain each indicator that might lead more people to become discouraged in the country. The fifth section concludes and included a short policy discussion
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