The Jobless Growth: The Shapley Value Approach to the Turkish Economy

Abstract

Although Turkey economy has been in a real growth pattern since the beginning of the 21. Century, unemployment rate keeps being high in a contradicting manner with the Okun’s Law which states that there is an inverse relationship between growth rate of an economy and its unemployment rate over its natural level, which is known as the jobless growth in the literature. The aim of this thesis is testing whether Turkey economy experienced jobless growth throughout 2009-2019 period and its intensity by using a game theory based decomposition analysis approach- the Shapley value- with which was come up by Lloyd Shapley in 1953 to show how the output generated by a coalition should be distributed among its members so that it be fair, which is the main scientific contribution of this thesis as this is the first time the Shapley value decomposition method was used for testing the jobless growth performance of the Turkish economy. Moreover, intensity of the jobless growth could be computed accurately thanks to the Shapley value decomposition method since it is an axiomatic decomposition approach, which is the secondary scientific contribution of this thesis. According to the results of the analysis, 41,3 % of growth of the Turkish economy over the time period from 2009 to 2019 was accounted for by the demographic changes while its rest accounted for by the economic activities. The share of the jobless part of the growth contributed by the economic activities is 58,665 % in the growth. Therefore, 99,665 % of the growth is jobless, which means that jobless growth is a major issue for the Turkish economy.