THE IMPACT OF LABOUR MARKET REGULATIONS ON THE MACROECONOMIC PERFORMANCE OF TÜRKİYE: AN ARDL BOUNDS TEST APPROACH

Authors : Ayça Sarıalioğlu Hayali, Djallel Aımar, Mohammad Mansoor Lodın

Pages : 498-517

Doi:10.53443/anadoluibfd.1443334

View : 120 | Download : 106

Publication Date : 2024-09-29

Article Type : Research Paper

Abstract :The relationship between labour market regulations and macroeconomic performance is accepted as a complex and controversial issue in the economics literature. The research investigates the effect of labour market regulations on Türkiye’s macroeconomic performance during the period of 1980–2021, using the Labour Market Regulations Index (LMRI), which reflects the flexibility or rigidity of the labour market regulations and based on seven dimensions, and the Macroeconomic Performance Index (MPI) measured by the Magic Hypercube (MH) method, incorporating four aspects of economic performance which are economic growth, current account, inflation, and unemployment. The research employs the Autoregressive Distributed Lag (ARDL) model to examine the existence and direction of cointegration relationship between LMRI and MPI and finds out that there is a cointegration between them. Still, when checked in detail, it seems that labour market regulations do not have a statistically important long-term effect on Türkiye’s macroeconomic performance.
Keywords : İşgücü Piyasası Düzenlemeleri, Makroekonomik Performans, ARDL, Türkiye

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