The latest situation on unemployment in Turkey

Every statistical data released by the Turkish Statistical Institute (TÜİK) triggers different reactions and interpretations in the public eye. Among the macroeconomic data released, the most controversial ones in the eyes of society are concentrated on inflation and unemployment data. Unemployment, a situation consisting of people who want to work but cannot find a job, is a critical macroeconomic indicator that deeply affects the economic and social structure. Influenced by many economic, social, and personal factors, and having many types such as open, hidden, natural, structural, seasonal, temporary, technological, and cyclical, unemployment in Turkey has shown various fluctuations in recent years, influenced by different dynamics.

According to the November 2024 Household Labour Force Survey published by TÜİK on January 10, 2025, while the narrow unemployment rate was 8.6% (3.1 million people), the broad unemployment rate, i.e., the seasonally adjusted idle labor force rate, reached 28.2% (11.4 million people). Although the number of narrowly defined unemployed has appeared to decrease by 491 thousand people in the last two years, the number of broadly defined unemployed has increased by 3.6 million people. This situation has led to a widening gap between the narrow and broad unemployment rates.

Comparison of Unemployment Rates in Turkey Over the Years

According to Turkish Statistical Institute (TÜİK) data, the unemployment rate, which was 9.9% in 2014, peaked at 13.7% in 2019. The unemployment rate, which was 13.2% in 2020 due to the impact of the COVID-19 pandemic, was recorded as 12.0% in 2021, 10.4% in 2022, and 9.2% in 2023.

TÜİK considers as unemployed those non-institutional persons of working age who are not employed during the reference period, have used at least one of the active job search channels in the last four weeks to find a job, and are available to start work within 2 weeks. According to the results of the Household Labour Force Survey, the number of unemployed persons aged 15 and over decreased by 84 thousand in November 2024 compared to the previous month, reaching 3.1 million. The unemployment rate decreased by 0.1 percentage points to 8.6%. The unemployment rate was estimated at 7.0% for men and 11.7% for women.

The Gap Between Narrow and Broad Unemployment is Widening

While the narrow unemployment rate was 8.6%, the broad unemployment rate, expressed as the seasonally adjusted idle labor force rate (the idle labor force rate consisting of time-related underemployment, potential labor force, and the unemployed), was estimated at 28.2%. Thus, the percentage point gap between the broad unemployment rate and the narrow unemployment rate continues to show a widening trend.

The main reason why the narrowly defined unemployment rate appears to be falling stems from the deficiency in the TÜİK calculation method. The narrow unemployment calculation method does not cover time-related underemployment, discouraged unemployed, and those who are not looking for work but are ready to work. However, in the broad labor force calculation, time-related underemployment, discouraged unemployed, and those who are not looking for work but are ready to work are also considered unemployed. In other words, those who are unemployed but have not applied for a job in the last 4 weeks, or those who have worked for someone for a day for a wage, or those who have worked for a day for food without receiving a wage, are not counted as unemployed.

However, we see many people around us who are unemployed but have not applied for a job in the last 4 weeks, or who are not counted as unemployed because they have only worked for a few hours or days in the last four weeks. If we add these to the unemployment rate, we reach the broad unemployment rate or the idle labor force rate. For this reason, while the narrow unemployment rate appears to have fallen to 8.6%, the broad unemployment rate, which hovered in the 15-20% range in the 2014-2020 period, exceeded the 25% level during the pandemic period. As of the end of November 2024, broad unemployment is estimated at 28.2%. While broad unemployment (idle labor force) is calculated as 22.1% for men and 38.3% for women, the gap between broad female unemployment and broad male unemployment has risen to 16.2 percentage points.

Discouraged Youth Not in Education or Employment

The concept of "Youth Not in Education, Employment or Training" (NEET) is used as the Turkish equivalent of the English term and defines individuals who are not in any educational institution, are not working, and are not participating in vocational training processes. These young people lack both labor force participation and personal development opportunities. Generally, individuals between the ages of 15 and 24 are in this group. This situation points to significant disruptions in both the field of education and the labor market. The rate of young people who are not in education or employment is an indicator of the structural problems, economic crises, and political deficiencies that a society faces.

In our country, the rate of young people not in education or employment was 24.2% in 2022, fell to 22.5% in 2023, fell to 22% in the 1st quarter of 2024 and 20.8% in the 2nd quarter, and rose to 26.3% in the 3rd quarter. It is estimated that this rate is currently at the 25% level.

Government's Employment and Unemployment Expectations in the Medium-Term Program

In the Medium-Term Program (MTP 2025-2027) prepared by the Presidency of Strategy and Budget and the Ministry of Treasury and Finance, the government aims to implement labor market reforms that will increase employment and skill matching while establishing balanced and employment-supporting growth.

The program aims to ensure more intensive and effective participation in the labor force for segments that have difficulty participating in the labor market and cannot fully realize their potential, and to improve the quality and quantity of active labor market policies aimed at increasing the employment of segments such as women, youth, and the disabled.

It is projected that the unemployment rate will decline during the Program period to its lowest level since 2012. Despite the increase foreseen in the first year of the program, the government expects the unemployment rate to gradually decline and reach 8.8% in 2027 (it predicts that it will fall to 9.6% in 2025, 9.2% in 2026, and 8.8% in 2027).

Comparison with OECD Countries

According to the OECD report published on December 11, 2024, the average unemployment rate in OECD countries in October 2024 was 4.9%. In the same period, the unemployment rate in Turkey was 8.6%, well above the OECD average. A similar picture is seen in youth unemployment rates; according to the data in the OECD's September 2024 report, Turkey has one of the highest youth unemployment rates among OECD countries at 17.1%.

Reasons for low unemployment rates in OECD countries include strong social security systems, effective labor market policies, and high education quality. For example, the dual education system implemented in Germany reduces unemployment by enabling young people to gain both theoretical and practical skills.

Conclusion and Evaluation

In the last decade in Turkey, unemployment rates have followed a volatile course and have been influenced by various internal and external factors. TÜİK labor force statistics contain important messages despite the deficiencies in the calculation method and the constantly widening gap between narrow and broad unemployment data. In parallel with the increase in time-related underemployment and the loss of hope in finding a job, the broad unemployment rate is increasing, and the gap between it and narrow unemployment is widening. The most important reason for the widening of this gap is the increase in the number of time-related underemployed, those who have lost hope, those who are not looking for work but are ready to work, and those who are looking for work but cannot start a job.

There are many reasons for the high unemployment rates in Turkey: Economic fluctuations, the mismatch between the education system and the labor market (skills mismatch), informal employment, regional differences, and low female labor force participation are among the main causes of unemployment.

In Turkey, young people defined as "home youth" or "idlers," who do not receive education, do not work, and are not looking for work, are included in the NEET category. While they do not have economic independence, these young people usually live in their families' homes. The high rate of young people in the NEET category leads to many socioeconomic problems such as social instability, increased crime rates, economic and social costs, social exclusion, and adjustment problems.

When compared with OECD countries, it is seen that Turkey's unemployment rates are high. Many socioeconomic policies can be implemented to alleviate the unemployment problem in Turkey. To solve this problem, policies such as restructuring the education system according to the needs of the labor market (education reform), encouraging vocational and technical education, increasing cooperation between industry and educational institutions, reducing informal employment, supporting female employment, entrepreneurship supports, employment incentives, and regional development projects must be implemented.