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Dynamic analysis of employment and domestic value added generated by foreign demand in Turkey

Mıhçı, Sevinç
Akkoyunlu Wigley, Arzu
Dalgıç, Başak
The aim of this paper is to analyze the change in the employment generation potential of exports at the sectoral level for recent years by using the input-output methodology. Indirect and direct "wage-share" of one unit of exports are estimated by using the input-output table of 2002 and the sectoral Trade in Value Added (TiVA) statistics. Our estimation results show that the average wage content of one unit of exported product, which is used as a proxy for the employment generated by exports, decreased between the years 1995 and 2008. The falling domestic value added (DVA) component of exports is responsible for this weakening role of exports in employment generation. The firm level data indicate similar results in terms of the direct domestic value added and employment effects of exports for the period 2003-2012. However, the firm level data also suggest the possibility of an increase in the indirect domestic value added and employment generated by exports due to the decrease in the imported intermediate input content of output by exporter firms in recent years.