Determining Influencing Factors of Unemployment in Turkey with MARS Method

Abstract

Higher unemployment rate is the problem of most of the countries in the world. Because of this situation, these countries try to make many actions in order to decrease unemployment rate. However, to make such a recommendation, first of all, the reasons of the unemployment should be analyzed. Within this framework, the aim of this study is to identify the factors which influence unemployment in Turkey. For this purpose, quarterly data for the periods between 2003 and 2016 is evaluated with MARS method. It is concluded that economic growth negatively affects unemployment in Turkey. Another result of this study is that higher inflation rates negatively affect unemployment rate. The last conclusion of this analysis is that interest rate has a positive influence on the unemployment rate. While considering these results, it is recommended that economic performance of the country should be improved and interest rates should be declined to decrease unemployment rate in Turkey. Another recommendation is that implementations, which are aimed to decrease inflation rate, should be controlled carefully because any implementation which aims to decrease inflation rate causes unemployment rate to increase.