Does Increased Institutional Quality Reduce Unemployment? Evidence from OECD Countries

Abstract

The success of the economic policies implemented to ensure macroeconomic stability is closely related to the institutional structure in the country. The number of studies emphasizing that even well-designed policies are likely to fail unless they are supported by a solid institutional infrastructure is increasing day by day. As it is known, one of the main macroeconomic problems of countries is unemployment. The chances of success of policies implemented to reduce unemployment are low in countries where institutional indicators are not good. For example, employment policies will not work effectively in countries where there is nepotism rather than merit in recruitment. Again, if the rule of law is not in question, employment contracts will not be able to fulfill their function. The aim of this study is to examine the relationship between unemployment and institutional quality for the period 2002-2019 in 38 OECD member countries. The World Governance Indicators (WGI) published by the World Bank were used as the institutional quality indicator in the analysis. First of all, WGI indicators were combined with principal components analysis (PCA) to form a single index. This index and the effect of each subcomponent on unemployment separately were analyzed using the Dricol Kraay Resistive Error Estimator method. According to the results of the analysis, as the institutional quality increases, the unemployment rate decreases.

Keywords

• Unemployment
• Governance Quality
• institutional infrastructure
• Panel Data Analysis

Artan Kurumsal Kalite İşsizliği Azaltır mı? OECD Ülkelerinden Kanıtlar

Abstract

Makroekonomik istikrarın sağlanması için uygulanan iktisat politikalarının başarısı, ülkedeki kurumsal yapı ile yakından ilişkilidir. İyi şekilde tasarlanmış politikaların bile sağlam bir kurumsal alt yapıyla desteklenmediği sürece başarısızlık ihtimali olduğunu vurgulayan çalışmaların sayısı gün geçtikçe artmaktadır. Bilindiği üzere ülkelerin temel makroekonomik problemlerinden bir tanesi işsizliktir. İşsizliği azaltmak için uygulanan politikaların kurumsal göstergelerin iyi olmadığı ülkelerde başarı şansı düşüktür. Örneğin işe alımlarda liyakat yerine kayırmacılığın olduğu ülkelerde istihdam politikaları etkin işlemeyecektir. Yine hukukun üstünlüğü söz konusu değilse iş sözleşmeleri işlevini yerine getiremeyecektir. Bu çalışmanın amacı 38 OECD üyesi ülkede 2002-2019 dönemi için işsizlik ile kurumsal kalite arasındaki ilişkiyi incelemektir. Analizde kurumsal kalite göstergesi olarak, Dünya Bankası tarafından yayınlanan “Dünya Yönetişim Göstergeleri” (WGI-The Worldwide Governance Indicators) kullanılmıştır. Öncelikle WGI göstergeleri temel bileşenler analizi (PCA) ile birleştirilerek tek bir endeks halinde getirilmiştir. Bu endeks ve her bir alt bileşenin ayrı ayrı işsizlik üzerindeki etkisi Dricol Kraay Dirençli Hatalar Tahmincisi yöntemi ile analiz edilmiştir. Analiz sonuçlarına göre kurumsal kalite arttıkça, işsizlik oranı azalmaktadır.

Keywords

• işsizlik
• yönetişim kalitesi
• kurumsal altyapı
• panel veri analizi

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