The impact of the global financial crises on regional unemployment in Turkey

Abstract

Turkey is a developing country which struggles with both high aggregate unemployment rates and persistent regional unemployment rate differentials. In this context, this study analysis both the comparison of the factors that affect unemployment rates at a regional level (NUTS level 2 regions – 26 sub regions) during (2009) and after the global financial crisis (2012) and its spatial effects (neighboring effects). According to the results, the factors that explain differences in unemployment rates have not substantially changed during and after the financial crisis. While the effect of migration rate, population growth rate and the share of agriculture sector in employment were significant in 2009, the effect of migration rate and agricultural employment on regional unemployment was significant in 2012. Moreover, while the spatial effects played a role in 2009, no spatial effects were found on the unemployment rate in 2012. © International Economic Society.