Abstract:

This study investigates the trends of and factors behind discouraged workers in Turkey during the period 1988-2014. According to ILO (1982), discouraged workers are those who wanted to work, but are not employed, and not job seekers anymore because they believe there is no work available for them. In this paper, it is put forward that the number of discouraged workers in Turkey cannot be ignored. Using data from Turkstat, World Development Indicators, and Turkish Ministry of Development, locally weighted (LOESS) regressions are estimated for the possible determinants of discouragement. The results demonstrate that discouragement increases rapidly after a certain per capita income threshold is reached. Besides, as unemployment increases, people are more eager to become discouraged, which is an expected relationship. Surprisingly, in the recent period of increasing employment, a rise both in the number and share of discouraged workers is detected in Turkey. The crisis years (especially 2001) seriously accelerated discouragement at higher secondary and tertiary school enrolment rates. Furthermore, discouraged workers increased gradually as services value added share increased, whereas industrial and agricultural value added shrank. Urbanization also triggers discouragement. These findings are expected to have important policy implications for Turkey, which tackles with significant issues regarding unemployment levels and human capital development.

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