IMPACT OF ENTREPRENEURSHIP ON EMPLOYMENT: AN ECONOMETRIC INVESTIGATION FOR TURKEY

Abstract

As is the case in the past, one of the main problems faced by economic administrators and political decision makers is increasing employment and struggling with unemployment. Turkey is a country that has had to deal with the high unemployment rates seen in almost every period since 1960’s. Especially after the 1980s, unemployment which started to increase due to globalization and technological progress reached high levels in the 1990s in terms of global measures. Besides financial and monetary policies, there are various social tools that governments can use for this purpose. Subsidies for the private sector, assistance to self-employed people, investment incentives and facilities can be regarded in this framework. It can, therefore, be expected that these policies to support entrepreneurial activities will contribute positively, both indirectly and indirectly, through employment and growth. In this study, reflections of the increase in entrepreneurship onto employment and unemployment are empirically investigated for the case of Turkey. According to the empirical findings obtained from the analysis carried out using modern time series analysis tools, while the increase in entrepreneurial activities in Turkey has a positive effect on employment in the long run, it does not have the expected effect on unemployment. This seemingly contradictory result can be explained partly by the weakness of entrepreneurial skills and partly by analyses of unsuccessful and inadequate investment.