Military expenditure and employment in Turkey

Abstract

Even though the military expenditure - economic growth relationship has been intensively investigated in the defence economics literature, few studies have been devoted to investigate the nature of military expenditure related employment in armed forces, civil service and in the industries that supply defence material. In the literature, there is no general agreement concerning the effects of military expenditure on employment. Military spending would increase employment, as vast numbers of workers are employed either directly by military-related operations or in a variety of service or supporting roles, or spending on the armed forces may generate increased demand in the economy. However, military expenditure devoted to high-technology labour saving weapon systems can be expected to increase unemployment. The purpose of this study is to assess the importance of military expenditure, among other things, in determining the level of employment in Turkey. Employment equation is specified using a CES production function and modelled employing ARDL technique. Our findings indicate that military expenditure negatively effects employment in Turkey.