Gender, Policy, and the Economy: The Impact of Government Social Spending on Female Unemployment Rate in Turkey

Abstract

Within the context of high unemployment for women, as well as social, cultural, or political barriers that may influence whether women choose to participate in the Turkish labor market, this study focuses on the female unemployment rate and how government social expenditures affect it. The report estimates the effect of government social spending shocks on female unemployment in Turkey using vector autoregression (VAR) models: structural vector autoregression (SVAR), long-run structural vector autoregression (LR SVAR), and vector autoregression with exogenous variables (VARX). By incorporating additional macroeconomic variables through quarterly data from 2002 through 2021, the study finds that in the short run, increased government social spending initially decreases female unemployment rates and then shortly increases female unemployment rates. The study also finds that increased government social spending negatively affects female unemployment rates in the long run. Overall, the study’s results set an empirical foundation for gendered inefficiencies within the Turkish labor market, which provides an opportunity to promote key policy recommendations that address the high instances of female unemployment and the lack of an expansive presence of women participating in the Turkish labor market. Keywords: Turkey; government social expenditure; female unemployment rate; vector autoregression (VAR), structural vector autoregression (SVAR), long-run structural vector autoregression (LR SVAR), vector autoregression with exogenous variables (VARX)