The relationship between economic growth and employment: A dynamic empirical analysis for Turkey

The effect of economic growth on employment has become an important topic in the literature with the effect of jobless growth debate in recent years. When we investigate the studies in the literature, we could find a few empirical studies which employ dynamic analysis in order to investigate effects of economic growth on employment for the Turkish economy. In order to fill this gap, we investigate the effect of economic growth on employment dynamically for the Turkish economy covering the period of 2000-2012 employing Kalman filter model. Our results indicate that, we found increasing effect of economic growth on employment at high growth term after the global financial crisis which different from high growth term between 2004-2005. We think that these results depend on the realization of demand postponed in the crisis period. Shortly, the usage of unemployed capacities showed positive effect on growth and employment in the economy after the global crisis.