Abstract:

In this study, time series analysis with multiple structural breaks methods are used to empirically analyze the effects of informal employment on tax revenues and economic growth in Turkey. In this context; first, stationarity of the series was examined with Kapetanios (2005) unit root test with multiple structural breaks and it was determined that all series became stationary when their first differences are taken. Then, the existence of cointegration relationship among series was analyzed by Maki (2012) cointegration test with multiple structural breaks. In this analysis; it has been determined that there is a cointegration relationship between the series included in the models. The structural break dates determined in the cointegration vector by the Maki (2012) test were included in the long and short term analyzes with the help of dummy variables created by us.In the study, long and short term analyzes were carried out with FMOLS, DOLS and CCR methods. In the long term analysis; it was determined that increases in informal employment decrease tax revenues, while economic growth increases tax revenues. In addition, it was observed that increases in informal employment decrease economic growth, while formal employment raises economic growth. In the short term analysis; It was also determined that informal employment reduces tax revenues, this effect is greater than in the long run, economic growth increases tax revenues, but this effect is lower than in the long run. Error correction mechanisms of the models operate. Therefore, the analyses made are reliable.

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