Labor Market Reform in Turkey

Labor Market Reform in Turkey had been introduced to achieve an active and stable labor market policy. The Turkish government wanted to make the firms flexible and ensure social protection by means of more income and employment.
The reform also intended to restructure the public administrations in the companies.

Reasons Behind Labor Market Reform:
The growth rate of working age population was on the higher side, but the rate of employment growth had been decreasing and in 2000, that rate was below 50%.
The average annual economic growth was volatile which made the inflation rate high.
The chance of emigration in the labor market was decreasing.
Gross Domestic Product per capita was very low compared to the other European Union countries.
The decreasing qualified labor capital was decelerating the labor force as well as economic growth rate.
The low growth rate of employment potentiality in the country caused high poverty.
Reform Process:
Labor market flexibility was taken by the Government as a measure of labor market reform for efficient resource allocation. Turkey’s membership in the European Union had an important effect on the the countries economy and and this impact depended upon the peculiarities of labor market and the population structure.

Through the privatization policy, the Turkish government displaced many workers from the state enterprises and established a rule for early retirement for the elder citizens. The government initiated the privatization of the large scale organizations to form an attractive ambiance for the private sectors.

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Last Updated on : 26th June 2013