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EACEA National Policies Platform


3. Employment & Entrepreneurship

3.1 General context

Last update: 28 November 2023
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  1. Labour market situation in the country
  2. Definitions and concepts

Labour market situation in the country

The first legal arrangement in Turkey relating to public employment services is the Labour Law of 1936 and No 3008 which foresees prohibition of private offices engaged in employment services and conduct of such employment services under public monopoly. In line with provisions of this Law the Public Employment Agency was established in 1946 under the Law No 4837. According to the Law duties of the Agency were “to find jobs for workers compatible with their qualifications and to find employees for employers compatible with theirs”.

The Public Employment Agency concentrated in 1960s on activities relating to sending workers to foreign countries due to increasing labour need of industrialized countries, in particular Germany, and since they meet such need through foreign workers. In 1970s, due to economic problems in many countries and increase in unemployment its roles and responsibilities relating to employment development became intense and the Agency had a central role in development and implementation of employment policies.

The recession in industrialized countries after the Petroleum Crisis and increasing unemployment led to suspension of labour demand from foreign countries. Public Employment Agency failing to provide services needed by the labour market due to this progress and the liberal policies put into force intensively entered a new period with the Law on Unemployement Insurance No 4447 put into force in 1999;  in this new period an intense change and development started for the Public Employment Agency which was rapidly changing with the new duties assigned to it.

In parallel to changes in public employment institutions which recently became actors leading the labour market with active and passive labour policies implemented and which continuously follow up the labour market in addition to conventional employment activities changing labour markets, increasing duties and responsibilities as well as harmonization with the European Union have required the Agency to get restructured. Therefore, İŞKUR, which is Turkey's national public body for employement, was instilled with a structure that is able to implement active and passive labour policies effectively by continuously following up the labour market in addition to conventional employment services with the Law No 4904 published in the Official Gazette of 5 July 2003.

KOSGEB (Small and Medium-Sized Enterprises Development Organization) which was established with the Law No 3624 in 1990 and which is the most important public establishment in Turkey engaged in entrepreneurship had provided services and support only for SMEs (Small and Medium Scale Enterprises) engaged in manufacturing activities until 2009. However, increase in the potential of industries other than the manufacturing industry in Turkey in terms of generation of economic added value and employment and demands from SMEs engaged in non-manufacturing industries brought the necessity to extent target group of the KOSGEB to cover all SMEs into question. Accordingly, “The Law No 5891 on Amendment of the Law on Establishment of KOSGEB No 3624” was published in the Official Gazette of 5 May 2009 and No 27219. The legal basis necessary for support of non-manufacturing SMEs by KOSGEB was provided with the said Law amendment.

The population in working age between 15 and 64 in Turkey composes 67.2 % of the total population. Accordingly, Turkey is still experiencing a period in which population increase continues despite its decreasing speed and named as “demographical transition period”. In general, workable population increase with the increasing population. Taking into account demographical characteristics of Turkey, non-agricultural industries should create employment opportunities for more than 450 thousand people each year in order to keep the unemployment rate at reasonable level. However, continuous increase in the workable population, the agricultural industries which will keep losing employment due to economic progress and desire of women population whose educational background continuously increases to work at non-agricultural industry are the main factors that will lead to high increases in labour supply.

According to 2016 January data of TUIK (Turkish Statistical Institute), number of those employed reached 26 million 275 thousand people by increasing by 821 thousand people in comparison to the same period of the previous year and the employment rate is 45 % with an increase equal to 0.7 %. During this period number of those working at agricultural industry decreased by 30 thousand people and that of those working at non-agricultural industries increased by 851 thousand people. 18.3 %, 20.2 %, 6.7 % and 54.8 % of those employed are working at agricultural, industry, construction and services industry, respectively. Labour force was 29 million 565 thousand people in 2016 January with an increase of 852 thousand people in comparison to the same period of the previous year and the rate of participation in the labour force was 50.7 % with an increase equal to 0.7 %.Number of those unemployed for age equal to or more than 15 throughout Turkey was 3 million 290 thousand people in 2016 January with an increase by 31 thousand people in comparison to the same period of the previous year. Unemployment rate was 11.1 % with a decrease equal to 0.2 %.

According to TUIK (Turkish Statistical Institute) 2015 data, youth employment rate was 34.2 % in 2015 with an increase by 0.7 % in comparison to 2014. 18.5 %, 31.4 % and 50.1 % of young people employed worked at agricultural, industry and services industry, respectively. Young unemployment rate covering the age group between 15 and 24 was 19.2 % with a decrease by 0.8 %.

The labour market in Turkey is characterized by strong labour supply due to rapid population increase, small scale enterprises covering the major portion of the employment rate and various wage levels. It is known that some important structural reasons underlie such characteristics of the Turkish labour market. Which are in general;

  • Young population increasing with the increase in general population;
  • Difficulties encountered by educated labour force in finding job in terms of labour demand;
  • Those with educational background lower than high school grade including illiterate people composing more than half of the total labour force;

High share of agricultural industry in employment rate in terms of employment rate by industries and higher rate of informality.

Definitions and concepts

When assessing the youth employment in terms of existing institutional structures and legislation, according to Article 4 of the “Regulation on Rules and Procedures relating to Employment of Workers” the workers between 15 and 18 years old are “young workers”, the workers between 14 and 15 who completed their primary school education are “child workers”. On the other hand, in accordance with Article 71 “Age of employment and prohibition of employment of children” of the Labour Law No 4857 which is regulated by taking into account the European Union Directive 94/33/EC those younger than 18 years old are divided into two groups “child” and “young workers”. According to expressions used in the Law (art. 71/III, art. 73/I and art. 85/I, art. 87), those between 15 and 18 years old are defined as “young”. However, those younger than 15 years old are defined as “child”.