Insufficiency of narrow unemployment definition

In March, the unemployment rate in Turkey was realized as 13.2% compared to same month last year’s 14.1%.

In March, the unemployment rate in Turkey was realized as 13.2% compared to same month last year’s 14.1%. Compared to the previous month, it is seen that the unadjusted unemployment rate decreased by 0.4 points. The seasonally adjusted unemployment rate decreased by 0.9 points compared to the same month of the previous year and increased by 0.3 points compared to the previous month and was announced as 13%. According to the adjusted data, the unemployment rate in the young population is 25%; Non-farm unemployment was realized as 15.1%.


When we look at the comparable periods of March 2019 - March 2020, it is seen that the rate of labor force participation decreased by 4.4 points between the related periods. The labor force, which was 32 million 699 thousand people in the similar period of 2019, became 30 million 484 thousand people in March 2020. Labor force participation rate decreased from 53.4% ​​to 49%. When we look at the seasonally adjusted data; while the employment rate decreased by 3.4 points compared to the same period of the previous year to 42.6%, there is a decrease of 1 million 3 thousand people in seasonally adjusted employment compared to the previous month. In this period, according to the employment data adjusted for seasonal effects according to economic activity; 21 thousand people in the agricultural sector, 85 thousand people in the industrial sector, 202 thousand people in the construction sector, 694 thousand people in the service sector decreased.


We do not see real reflections in the labor market both due to the fact that half of the survey period belongs to the pre-Covid-19 period and the narrow definition of unemployment. After the epidemic, there is a significant difference between the non-operative and the unemployed since the employees who have been granted unpaid leave since mid-March do not fall under the definition of unemployed. The fact that most dismissed employees are not looking for a job due to bad conditions in the labor market increases this difference. Employment protective measures put into effect after April will also be effective in the absence of an excessive increase in the official unemployment rate. In this period, measures such as short-time work allowance, unpaid leave support, and prohibition of layoff will be effective. With the new employment shield package, the existing measures will be expanded for another 3 months, and it will be effective in not seeing the epidemic effects in official figures.


Contrary to the headline figures, there are actually details showing the deterioration in the labor market from the past. It is observed that there is an increase in the rate of seasonally adjusted unemployment compared to the previous month, and there is also a significant deterioration in the items such as employment participation rate, non-farm unemployment rate and youth unemployment rate. In this period, new employment strategies of companies will affect new hiring negatively and will be the most important barrier for the growth in the labor market.

Source: Tera Menkul
Hibya News Agency