More on unemployment

Mary Stokes has a thoughtful comment on my recent unemployment post. In addition to very precise and concise observations on Turkey's demographics, she poses a couple of really important questions:

What form do you see any potential social unrest taking? How much do you think high levels of unemployment will affect election results?

I definitely do not expect people taking in to the streets in the Latin American or French farmer Jose tradition. However, I do expect an increase in the crime rate at the very least. Unfortunately, I can not back this up or substantiate it, as I do not know any papers that tackle these issues (academics take notice). The problem is that TURKSTAT does not release the raw data and even when they do, they do not release the city codes of those surveyed, so you can not do any cross variation or panel. The rationale they give is that releasing the city codes could lead to dangerous conclusions about unemployment dynamics and therefore lead to social unrest (I am not kidding). A nice circularity, isn't it:):):) If you do not take my word for it, ask Insan Tunali of Koc University, a prominent labor economist, who fell out with them big time because of this issue. Anyway, something may come out on the references I gave on the earlier post, be sure to let me know if it does.

Coming to the second question, Zafer Yukseler of the Central Bank has a paper written in Turkish, where he notes that Economics plays an important role in Turkish elections (he does not do Econometrics a la the Fair model as far as I remember, just casual observation). In fact, you could argue that Economics has been vital in shaping the prospects of AKP, both in their coming to power after the 2001 crisis (of course, there were other factors involved as well) and thier diminished performance in the local elections. That's why I claim that they will open up the coffers to counteract unemployment.

Anyway, if you are thinking about digging these issues further, I would suggest you get in contact with the names I have mentioned above or Seyfettin Gursel of BETAM. The latter follows Turkish labor markets very closely.