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DOES THE PUBLIC INVESTMENT EXPENDITURES AFFECT THE EMPLOYMENT RATE? (AN APPLICATION FOR LEVEL 1 REGIONS OF TR8 AND TR9)

Abstract

Author(s): Cenap SANCAR, Canan SANCAR, Melike ATAY POLAT

In this study, it was aimed to look for whether public investment expenditures – that are used as basic policy tools to deal with imbalances in our country where regional imbalances are at high levels – create a change on labor force volume as an indicator of regional development at an expected rate. To this end, the 2008-2013 data related to public investment expenditures made in agriculture, services and industry sectors and the employment rates of Level 1 Region of TR8 and TR9 were analysed using panel data method. According to the empirical findings of the study, the increases in public investment expenditures in agriculture sector in TR8 Region have a negative effect on employment rate. The coefficients related to industry and services sector were negative but insignificant. The increases in investments made in agriculture sector within TR9 Region also have negative effect on employment just like it is in the TR 8 Region. On the other hand, it was concluded that increases in the investments made in the industry and services sectors have a positive effect on the employment rate of the TR 9 Region. In addition to this, it was also concluded that the investments made in the TR 9 Region are more influential in terms of increasing employment than the ones made in services sector.

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