Abstract

This paper investigates the relationship between unemployment rate and labor force participation rate for urban women in Turkey. By conducting our cointegration analysis on the aggregate and education-specific data, we find that there is a long-run relationship between the two variables for better-educated urban women, but not for total and less-educated urban women. Thus, our analysis reveals no evidence that high unemployment rate is a main driving force behind both the puzzle of low female labor force participation and the under-participation trap.  Long-run estimates for better-educated urban women show that a 1% increase in unemployment rate causes an increase in labor force participation rate between of 0.64% and 0.74%. The finding implies that there exists the added-worker effect for better-educated female in urban areas. Furthermore, the results of tests on causality show evidence of both short- and long-run unidirectional causality running from unemployment rate to labor force participation rate, but not vice versa.

 

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