Structural adjustment policies and export based growth strategies pursued since
the 80s determine labour markets and sectoral composition of employment. Turkey has
transformed from a state where agriculture dominated employment vis-à-vis industry and
services to another state where the employment share of agriculture is much smaller
while the share of services has grown and industry remains stagnant. Focusing on
traditional labour intensive lines of production, export-based industrialisation, however,
failed to create expected rise in demand for labour and growth in employment.
Meanwhile, continuing population growth, albeit at slower rates, further expand working
age population and thus labour supply. There is a significant gap between labour demand
and supply and the process of “jobless growth” taking on after the 2000-2001 crisis
enlarged this gap even further. In the post-crisis period, employment remained stagnant
despite increasing productivity, suggesting that this productivity increase results mainly
from longer working hours. In spite of various incentives and tax exemptions introduced
in order to encourage both domestic and foreign investment, expected boom in
investments did not happen at a level to satisfy earlier expectations. In the face of ever
increasing labour supply, the absence of extremely high rates of unemployment can be
explained by male employment in “own account” works or family based micro
enterprises and the fact that females, constituting half of total population, largely remain
out of labour force. Given traditional gender roles and patriarchal mentality, women are
associated with household affairs and childcare and labour force inactivity of women is
regarded only as normal. Jobless growth leads to expanding informal sector. Creation of
decent jobs is the most important challenge that Turkey has to face.