Regional Employment Volatility, Causes and Consequences: The Case of Turkey

Regional employment volatility is a phenomenon describing the strongly fluctuating patterns of employment. In the extant literature, far little attention has been devoted to understanding the causes and consequences of this phenomenon in developing countries. The present study aims to analyze the cross-regional determinants of employment volatility in Turkey. We use a range of panel data regression methods (Random Effects and OLS) and adopt employment data and various other explanatory variables for NUTS-II regions over the period 2004–2013. Our analyses indicate two main results: first, there are sizable cross-regional differences in employment volatility, and second, the volatility of a region is mostly related to demographic and market-size characteristics. Hence, regions with a high rate of labor market participation moderated growth rates and the ones constituting greater market areas experienced a relatively smooth employment pattern and, thus, enjoy a stable economy.