Globalization and Youth Unemployment Paradox: Turkey Sample

Globalization process, which has developed with the application of neo-liberal policies in the world, is the primary and most discussed concept in terms of its positive and negative effects on developing and developed countries. Aforesaid process has caused power imbalance between the developed countries that have completed their industrializations and developing countries that have not completed their industrializations; and with the liberalization of capital and commerce, it has made the capital sovereign on labor. In this context, the most important disadvantage of globalization, which is a knife-edge situation for developing countries, is unemployment. Unemployment for a developing country like Turkey, which has large young population, is a serious problem that globalization causes in economic and social field. The reason that underlies this problem is that globalization causes unemployed growth in Turkey that has a young and dynamic population. The relative height of young unemployed in the rates of unemployment affects the Turkish nationality growing unemployed with its economic, social and psychological dimensions deeply. In this study, it is aimed to determine the dynamic economic effects of globalization process exercising power over Turkey with 1980s onwards on youth unemployment. In this context, the relationship between youth unemployment and globalization was econometrically analyzed with VECM approach by using the annual data of 1980-2011 periods. With Johansen Co-integration Test, long term relationship between youth unemployment and globalization variables was researched and with error correction variable the time to adjust the deviation that may occur in long term balance was determined. Moreover, with the results of Impulse-Response Function and Variance Decomposition, solutions are offered for sustainable economic development and effective employment policy by revealing how youth unemployment reacts to globalization and how it has been affected from globalization. Keywords: Globalization, Youth Unemployment, Sustainable Economic Development, Employment Policy, VECM