Abstract:

The main purpose of this study is to examine the relationship between the construction sector, employment and economic growth for Türkiye, based on quarterly data between 2005 and 2023, by applying Zivot-Andrews (ZA) unit root, Phillips-Perron (PP) unit root and GMM tests. Additionally, the strength and direction of the relationship between the variables are calculated by employing the Granger causality test. In addition, the strength and direction of the relationship between the variables are calculated by using the Granger causality test. According to the results of both Zivot-Andrews (ZA) unit root and Phillips-Perron (PP) unit root tests, all series are determined as stationary at the I(1) level. Additionally, GMM analysis results reveal that employment affects economic growth for Türkiye from 2005 to 2023. According to the Granger causality test results, when the lag length is 2, both the construction sector is the Granger cause of economic growth and the economic growth is the construction industry's Granger cause. In other words, there is both a short-term relationship between the variables and a two-way relationship between them. Likewise, when looking at the relationship between employment and economic growth, there is both a short-term relationship and a bidirectional relationship between each other. Finally, when the relationship between the construction industry and employment is observed, it can be said that there is a short-term relationship between them and there is a two-way relationship between them. According to these empirical findings, well-planned public expenditures in Türkiye and rational fiscal policies regarding taxes applied to public construction works will promote employment and stabilize construction activities. Thus, the employment areas created by construction activities which have become more permanent through these steps to be implemented by the government and policy makers in Türkiye will also support a stable economic growth.

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