Yasemin ÖZERKEK

Employment Dynamics of the Largest Industrial Firms in Turkey (1980 -2006)

2008

(Supervisor: Fatma Doğruel) 

ABSTRACT

The analysis of gross job flows in the labor market has attracted much attention in recent years. Economists began to make wide use of firm/establishment level data in order to elucidate the dynamics of aggregate employment. Turkish economy, which adopted a more outward-oriented economic development strategy in the beginning of 1980s, attracts attention to examine its job flow dynamics. To this end, this thesis analyzes the gross job flow dynamics of the largest industrial firms in Turkey in the period 1980-2006. The job flow statistics evinces how employment dynamics of the largest manufacturing firms react in different periods and crisis/recessionary years; whether the largest private manufacturing firms differ from all-private manufacturing firms in terms of job flow dynamics at sectoral level; and how the firm size categories vary in their employment dynamics in the Turkish private manufacturing industry.

The findings show that there exist both job creation and job destruction in all phases of the business cycle for the largest private industrial firms. Recessions/crises (booms) are typically times of high (low) job destruction and low (high) job creation. These firms are heterogeneous in employment behavior and their job reallocation process is long-term in nature. The largest public firms exhibit different employment dynamics from the largest private firms in that the recessionary years are not reflected in their job flow statistics and they are a more homogenous group of firms.  Furthermore, at the sectoral level, private manufacturing firms and the largest private manufacturing firms show distinct behavior in the face of economy wide disturbances.  Large firms in the Turkish private manufacturing sector have a greater potential to create and destroy jobs than medium-size and small firms. As the firm size grows, net employment growth increases. The diverse effects of recessions/crises on firm size groups are also striking.