Özet:

The aim of this study is to investigate the impact of public investment on employment in Turkey at the regional level. Unlike other studies, in this study it is examined that whether public investment has any potential effect to create new jobs for youth unemployed. The dynamic relationship between public investment and employment was analyzed with panel cointegration and causality tests by using the annual data covering 26 regions for the period 2004-2016. According to the ECM cointegration test and ARDL-PMG estimation results, there is a significantly long-run relationship between public investment and employment. The findings also indicate that public investment reduces unemployment and youth unemployment in the long-run at the all regions except for the TR90 and TRC3. Additionally, there is only a long-run causal relationship between public investment and employment. The direction of causality is a unidirectional causality from public investment to unemployment and youth unemployment. According to this results, it can be said that public investment is an effective fiscal policy choice in order to combat unemployment in Turkey.

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