Identifying the Relationship between Labor Productivity and Economic Development for Turkey

Kalkavan H., Yüksel S., Dinçer H.

in: Productivity Growth in the Manufacturing Sector, M. K. Pal, Editor, Emerald Ink Publishing, Bradford, pp.43-54, 2021

  • Publication Type: Book Chapter / Chapter Research Book
  • Publication Date: 2021
  • Publisher: Emerald Ink Publishing
  • City: Bradford
  • Page Numbers: pp.43-54
  • Editors: M. K. Pal, Editor


The aim of this chapter is to determine the relationship between labor pro- ductivity and economic development. In this context, the annual data of Turkey on a range of 19702017 are included in the study period. On the other hand, these data are tested with the help of Toda Yamamoto causality analysis. Thus, it will be possible to determine whether there is a strong relationship between the two variables. According to the obtained results of the analysis, it is de!ned that there is a causal relationship from labor productivity to economic growth in Turkey. Based on these results, it can be said that labor productivity should rise in order to increase economic development in Turkey. For this purpose, educational programs in Turkey can be revised with the help of a detailed study. In this process, cooperation with companies to understand the needs in the market plays a key role. Additionally, regulations should also be prepared related to the salaries of the employees. If it can be possible to prevent employees from receiving wages below a certain amount by placing a minimum legal limit on salaries, it will be possible to increase the motivation of the employees. This situation has a positive and signi!cant contribution to the labor productivity.

Keywords: Labor productivity; economic development; Toda Yamamoto; growth; optimal wages; regulations