Markets Factor Markets Econ 102 Spring 2015 Markets

Markets Factor Markets Econ 102 Spring 2015

Markets • Goods and Services Markets • Factors and Production Markets – – Capital, Labor • Financial Markets– Financial Assets.

Turkish Labor Market 2012 (in thousands)

Labor Force Participation and Unemployment rate (2014) • Labor Force Participation Rate: (Labor Force/Working Age Population)x 100= 48. 6 % • Unemployment Rate: (Unemployed/Labor Force)x 100= 10. 7 % (Non –agricultural U% = 12. 7 %) (Male U% = 9. 7 %) (Female U% = 13 %) (Youth U% = 19. 9%)

Labor Force Participation and Unemployment rate (2012) • Labor Force Participation Rate: (Labor Force/Working Age Population)x 100= 48. 6 % • Unemployment Rate: (Unemployed/Labor Force)x 100= 9. 9% (Non –agricultural U% = 12. 1 %) (Youth U% = 17. 4%)

Turkish Labor Market December 2012 (in thousands) or (in %) Kurumsal olmayan nüfus (non-institutional pop) 73326 15 ve yukarı yaştaki nüfus (population above 15 yrs) 54438 İşgücü (Labor Force) 26431 İstihdam (Employment) İşsiz (Unemployment) 23817 2615 İşgücüne katılma oranı (%) (labor force participation rate) 48. 6 % İstihdam oranı (%) (employment rate) 43. 8 % İşsizlik oranı (%) (unemployment rate) 9. 9 % İşgücüne dahil olmayanlar (not in the labor force) 28007

Labor Force Participation Rate in Countries World Bank Statistics 2011 76, 9 80, 4 75, 5 68, 9 65, 0 Sw ed en n pa Ja . Ko r ea at St d ite Un , R ep es a in Ch ke Tu r Re ab Eg yp t, Ar am Isl n, Ira p. ic gd o Ki n d ite Un Re m y an rm Ge ce ee 52, 9 y 52, 0 46, 7 Gr 79, 7 74, 3 72, 8

Per Capita GDP (2012 at 2005 constant US dollars) 2012 50000 45000 40000 35000 30000 25000 2012 20000 15000 10000 5000 0 Greece Germany United Iran, Egypt, Turkey Kingdom Islamic Arab Rep. China United States Korea, Rep. Japan Sweden

Unemployment rates 1996 -2011 for various countries 20 18 16 14 12 Greece Germany 10 Turkey 8 United States Japan 6 4 2 1 201 0 201 9 200 8 200 7 200 6 200 5 200 4 200 3 200 2 200 1 200 0 200 9 199 8 199 7 199 6 0

US Unemployment rate US U% 12 10 8 6 US U% 4 2 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

US Unemployment rate and Participation Rate 67 12 66 10 65 8 64 6 US Participation Rate U% 63 4 62 2 61 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

2005 -1 2005 -4 2005 -7 2005 -10 2006 -1 2006 -4 2006 -7 2006 -10 2007 -1 2007 -4 2007 -7 2007 -10 2008 -1 2008 -4 2008 -7 2008 -10 2009 -1 2009 -4 2009 -7 2009 -10 2010 -1 2010 -4 2010 -7 2010 -10 2011 -1 2011 -4 2011 -7 2011 -10 2012 -1 2012 -4 2012 -7 2012 -10 2013 -1 2013 -4 2013 -7 2013 -10 2014 -1 2014 -4 U% Turkey 16, 00 14, 00 12, 00 10, 00 8, 00 6, 00 Turkey 4, 00 2, 00 0, 00

Definition of Unemployment • US: Current Population Survey, Current Employment Statistics, Office of Workforce Security. (active) • Unemployed for 15 weeks or more. • Lost their job or completed a part-time job. • Unemployed and actively looked for a job in the last 4 weeks. • TURKEY: TUIK (passive) • Looked for a job in the last 3 months, • Can be employed within 15 days.

Turkish Employment and Unemployment Data • The information is collected from Household Labor Force Survey by TUIK • 13 000 households, • “Are you connected to any workplace or did you work for at least an hour in the last week? ” Note: (If you count those who worked more than 16 hours then the Unemployment rate will increase by + 3. 4)

Are there other sources for employment data? • Bagkur ve SSK_ employment information but not complete because of non-registered workers and agricultural workers. • Iskur_ the number of unemployed actively looking for a job. • Their coverage is not exactly the same. But l comparisons can be made when you follow the registered (formal) employment data part of the household survey.

Some details of the Household labor force survey

Household labor force survey Background information: • Started in 1966 -87 on a trial basis • How often is the survey conducted? – 1988 -1999 conducted twice in every year – Since 2000 conducted every month • Published monthly, since 2005, • Seasonality is present. • Turkey is divided to 12 districts (cities and rural district details) • Another classification is for 26 districts without rural or non-rural distinction.

Information on HLF Survey • Does not provide labor market data in city level. – (Only a few of the countries are capable to do that because their record of employment is advanced) • Has been conducted in accordance with the Eurostat questionnaire and its standards, since 2004. • When the EUROSTAT changed in the standards and revised its definitions, Turkey adopted the new standards and the number of questions doubled,

Information on HLF Survey • Minor differences between Eurostat and TUIK classifications: • Ages: – Eurostat: Over 15 and less than 65 – TUIK: Over 15 • Unemployed: looking for a job during… – Eurostat: Last 4 weeks and with active search – TUIK: Last 3 months and with passive search.

Coverage of HLF Survey • To non-institutional population: excludes living in hotels, dorms, any institution (prison, care facilities for children and old), military barracks. • Working age is defined as +15 of age group. • Household- living together, giving joint consumption decisions with joint income. • Household is defined by the address. • Turkey is divided into blocks of 100 households. • Each selected block is visited 4 times a year to complete the information. • 13000 households are visited every month; for each 3 months period 123000 people is surveyed and 90000 are 15 and above age.

How is the survey conducted? • Household is sent a letter ahead of the visit. • They ask the questions about a ‘reference week’, starts on Monday following the reference week and completed within 1 -3 weeks. • Everybody is talked to; – Ages 6 and above are questioned about their education status. – Ages 15 and above are questions bout their employment status. • They are recorded electronically. Any mistake is tried to be corrected during the survey. • Each month different set of households can be surveyed. • Checked and corrected locally and then in central offices. • Projections for the whole population are computed via weighting schemes. • 45 days after the end of each month the survey results can be published.

How is the labor force defined? (İş gücü tanımı) • The labor force is all population above 15 who is total number either working and looking for a job. • Use a concept of ‘reference week’ which is first Monday to Sunday of each month. • They are asked whether they have worked (at a jobs) in return for salary, wage, for him(her)self, for the family for at least an hour; • If they are wage and salary earner and they not at their jobs but continue receive 50% of their salary or they will return in 3 months, they are employed. • Daily-wages earners who look for a job every day, have to be employed in the reference week. • Seasonal workers who are not at their jobs and who are working with daily wages are considered ‘unemployed’ if they say that they are looking for a job; and ‘not in labor force’ if they are not looking for a job. • Unpaid family workers will have to be working within the reference week. If not, they will be treated like the rest and same criteria is used.

Unemployed • People who do not have a job, who is looking for a job within the last 3 months and who can start working in 2 weeks if he finds a job.

Underemployment Individuals who is • working less than 40 hours a week or • working but looking for another job.

Cases to consider… Individuals who are: • doing practical training, • housewives, • farmers who are producing for his own consumption, • volunteer work,

Not In the Labor Force • The part of population capable of working but not in the labor force. 1. Capable of working but not looking for a job. – Has no hope finding a job_discouraged workers – Not looking for a job for other reasons. (seasonal worker, retired or has other income, has for other reasons not looking for a job) 2. Not capable of working. – (students, housewives, disability, family or personal reasons)

Unemployment Benefits • US: lost his/her job involuntarily, up to 26 week, based on amount of earnings and the number of quarters worked, (average is $293 weekly) • Germany: 12 months contribution prior to loosing his job, 60 % of his salary, for 12 months, longer if older than 55 (max. 2964 euro). • Turkey: has to apply within 30 days of loosing job, should have been working 120 days when become unemployed, should have worked a min of 600 days prior with security payments, 40% of the salary but less than 80 % of the min. wage.

Unemployment types 1. Frictional Unemployment Natural Rate of Unemployment 2. Structural Unemployment 3. Cyclical Unemployment