REGIONAL LABOUR PRODUCTIVITY GROWTH AND STRUCTURAL CHANGE IN TURKISH ECONOMY

Abstract

Structural change is labelled as the shift of resources from low productive sectors to those with high-value-added. The structural change process can stimulate the evolution of the economy by increasing productivity. This study examines structural change and the bases of labour productivity evolution in 26 regions of Turkey for 2010-2020 period. Therefore, the Shift-Share Analysis method was employed in the study. The TURKSTAT gross domestic product in chain-linked volume, index and percentage change (2009 = 100) and employment by kind of economic activity data were utilized. The consequences revealed that the within-sector effect is the primary basis of productivity evolution in 26 regions of Turkey. The structural change has a positive but minor bearing on total labour productivity evolution in almost all regions. The within-sector effect is more dominant in the agricultural sector, but the bearing of structural change is negative. Similarly, the within-sector effect is stronger in the regions' industrial sectors (except for TR71, TRA1, TRA2, TRB2). The bearing of structural change in the services sector was better than in other sectors. As a result, it has been observed that the labour force is not directed to high-value-added sectors, particularly in the agricultural and industrial sectors, but the situation is better in the services sector.