THE RELATIONSHIP BETWEEN INDUSTRIAL PRODUCTION AND EMPLOYMENT UNDER STRUCTURAL BREAK

For the economies which aim for the sustainable economic growth, one of the most important topic is industrialization. It is thought that it effects employability positively, by increasing the manufacturing. This study investigates the long-term relationship between industrial production and total employment, industrial employment and youth employment in Turkey using monthly data for the period from 2005:01 to 2017:06. Since the period involving structural changes, the stability of series was tested by standart Augmented Dickey Fuller unit root test and Zivot Andrews unit root test with structural breaks. Estimates of the cointegrating relation are obtained using Engle-Granger test procedure and Gregory Hansen test procedure taking structural breaks into account. The results of cointegration tests show that there is no long run relationship among the variables. The findings of the study indicate that the connections between industrial production and employment have been disappeared, during the time period examined for Turkey. This also suggests that the rise in the industrial production is still far from creating employability.