Relation Between Growth and Unemployment Rates

Abstract

Growth is one of the most important processes in achieving macro objectives for all developing and developed countries. For this reason, stabilization programmes are generally built on economic growth. When this situation is evaluated from the perspective of Turkey, economic growth is in constant fluctuations and is affected by external factors; therefore, fluctuations in economic growth in Turkey affect employment and cause contractions in unemployment rates. Unemployment rates in Turkey, speculative growth phenomenon and global financial developments affect economic growth. In other words, the positive or negative impact of economic growth on the level of employment is not unique to Turkey; external debts, budget deficits, rising interest rates and economic instability are the conditions that can slow down growth.

With the developing and globalizing economy, the need for a new labour force emerges, which requires the creation of new business areas and opportunities. Therefore, increasing labour force and employment, which is one of the main factors of production, is an integral part of economic growth. For a growing economy, the more positive the increase in labour force, the more economic growth develops in a positive direction. For this reason, it is of great importance that governments and the private sector take measures in coordination for unemployment, which is one of the most important problems of economic growth. Because addressing and analysing the problem alone makes it difficult to formulate solutions and eliminate the problem. Therefore, it is important to minimize the unemployment rate for economic growth. In this context, career development, the creation of new business areas, giving importance to new investments and supporting competitive innovation activities can contribute to increasing employment and productivity  solving the unemployment problem.