The Effect of International Trade on Employment in Turkey

The final goods export and import analyses for employment explains the relationship between international trade and employment in a limited way; because a significant part of international trade occurs within international production chains. The international trade structure is based on international production chains, so the effects of international trade on employment are complicated. In addition to the effect on employment of exports and imports; the import content of exports, the export content of imports and the intermediates within imports from a third country have to be considered. The aim of this paper is to reveal the effect of international trade on employment in Turkey through five components, using the World Input Output Table (WIOT) for 2014. The methods proposed in Stehrer et al. (2012) and Xiang (2013) were used to decompose the employment effect of the international trade of Turkey by trading partner and sector. The analysis shows that in 2014, exports led to a demand for about three million jobs in Turkey. International trade in textiles had the highest employment demand, both in Turkey and abroad at the same time. With regard to the analysis by country; international trade with China, India and Indonesia created more employment in those countries than in Turkey.