Productivity Indicators and Industrial Employment in Türkiye: Evidence from Regional Panel Data
Productivity Indicators and Industrial Employment in Türkiye: Evidence from Regional Panel Data

Summary/Abstract: The objective of this research is to analyze the association between employment dynamics and productivity indicators in the industrial sector at the regional level in Türkiye. The industrial sector holds critical importance for the Turkish economy, both in terms of production and employment. However, rising energy costs, external dependency, and technological transformation are among the key dynamics shaping industrial employment. Within this framework, the study primarily explores the influence of labor productivity and energy productivity on employment, while also considering control variables such as the portion of industry in GDP, the ratio of university graduates, and patent applications. The analysis spans the period from 2004 to 2023 and utilizes a panel dataset comprising 26 NUTS-2 regions in Türkiye. After testing the stationarity of the series, estimations were conducted based on the panel ARDL estimation strategy. The findings unveil that, in the long term, labor productivity harms employment, whereas energy productivity has a positive influence on employment. Moreover, the share of industry, the proportion of higher education graduates, and patent applications are found to have long-term employment-enhancing effects. Overall, the study demonstrates that energy efficiency policies hold significant potential not only for ensuring energy security and reducing external dependency but also for supporting employment. In this regard, the results provide valuable insights for policymakers.

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