- 1 -

/ REX/258
EU-Turkey Joint
Consultative Committee

Brussels, 4 April 2008

24th meeting of the EU-Turkey Joint Consultative Committee

Istanbul, Turkey

10 & 11 April 2008

JOINT REPORT

YOUTH AND EMPLOYMENT (IN THE FRAMEWORK OF THE EMPLOYMENT STRATEGY)

RAPPORTEURS

Tomasz Jasinski

EESC member – Employees Group

Member of the EU-Turkey Joint Consultative Committee

Senior specialist in international cooperation and European integration, All-Poland Alliance

of Trade Unions (OPZZ)

Pınar Alkan

Member of the EU-Turkey Joint Consultative Committee – Employees Group

TURK-İŞ

- 1 -

1.Conclusions and recommendations

1.1During the EU integration process, the existence of an active and robust labour market in Turkey country is an important factor for the sustainable growth and the improvement inthe competitiveness of its economy.

1.2The main problematic areas in the context of the Turkish labour market are: insufficiency in the level of training and efficiency of labour, a low participation in employment and labour by women, the increase in youth unemployment, the high proportion of employment in the agricultural sector, and the extent of informal employment.

1.3Rapid population growth and immigration from rural regions to urban areas that constitute the make-up of the Turkish labour market have an impact on the development of informal employment. Immigrant workers accept work with lower wages and without social security since most of them are unskilled labourers.

1.4Although the existence of youth in the age pyramid is high and is considered as a “window of opportunity,” this situation will end in 2020 (or in 2040 as some researchers indicate).While there is such an opportunity ahead of Turkey, the participation of youth in the economy will gain in importance.

1.5Turkey needs educational and labour reform. In Turkey, the transition between education and the labour market occurs between the ages of 15-24. Thus, the performance during this transition period is important for youth employment.

1.6Increasing employability and decreasing youth unemployment with active employment policies should form a subheading of employment-oriented integrated policies.

1.7Supporting entrepreneurship is an important instrument of job creation for the youth, especially in a country like Turkey where youth unemployment is widespread. Youth- oriented training must be provided in management and entrepreneurshipin order to improve the management skills of the young people.

1.8Unemployment and especially youth unemployment has adverse effects onthe economic and social aspects. As youth is unemployed and unable to become economically active, the expenditures allocated for their education are considered as an economic loss. There are also political and social risks such as the risk of involvement in crime. The main reasons for youth unemployment in Turkey are:

  • Inefficient links between education and the labour market
  • Low level of education
  • The first acquaintance with the labour market, (especially for the age group of 15-24), insufficient information regarding the labour market, leaving work due to a lack of self- identity and family responsibility
  • The need to create a qualified labour force in an economy in which information and technology form the primary components
  • The fears of the employers as they believe that labour costs will increase due to the lack of work experience
  • High rates of unemployment, low quality employment, disliking their jobs, easy dismissals.

1.9The educational drop-out rate for students between the ages 18-24 is 15.7% in the EU-25 states (data before the accession of Bulgaria and Romania), while the same rate in Turkey is 50%. This data proves that the main source of youth unemployment is the lack of education. Compulsory education should be extended to 12 years in the short term. Interference in vocational education based on political concerns must cease and a vocational education model meeting the workforce demands should be established. Lifelong learning must be encouraged in order to increase the employability of individuals.

1.10Vocational guidance and counselling are the priorities of active employment measures for youth. Improving access to information both at school and at the start of employment will help to overcome important obstacles.

1.11Productivity in the agriculture sector must be increased. The problem of low productivity in the agriculture sector should be dealt with and the competitive power of the agriculture sector in the world markets must be increased. This will help to prevent youth migration from rural to urban areas.

1.12A reduction in the social insurance contribution premiums of young workers may result in an increase in youth employment.However, the implementations in the past were not successful in meeting such expectations. Hardly any improvements in terms of an increase in employment were recorded following the premium reductions from the minimum wage in 2004. Unless new jobs are created, such an approach, without any doubt, will result in a change in the age patterns of the labour force in order to maximise the benefits of the aforementioned incentive. These incentives must be rated in line with its contribution to the total employment.

1.13There are some assertions to encourage flexible work for youth and to simplify the restrictive provisions in the legislation governing the process of employment and dismissals. However, such an instrument will be insufficient in meeting the expectations in a country like Turkey, where unregistered employment is widespread.

1.14Target group-oriented active labour force policies covering youth should be implemented as young people are considered to be a disadvantaged group within the society. The strategies aiming to identify the distribution of financial resources within the target groups should be drawn up in consultation with the social partners. At present, the employers' contributions are inadequate and they abstain from undertaking their social responsibilities in terms of apprenticeship and internship.

1.15In recent years, the joint work culture between employers and employees has been improving in the area of employment in general and specifically in the struggle against youth unemployment.

1.16Efforts to improve the Turkish National Employment Strategy in line with the European Employment Strategy have been continuing since 1993, with no significant progress. National Employment Strategies and policies must be designed and implemented rapidly. Economic growth alone will not solve the problem of unemployment. Long-term economic and social policies covering all respective areas of legislation and determined within a tripartite structure are crucial.

1.17Research and Development policies aiming to enlarge enterprises and improve their capacities in the global competition are vital. Incentives to foster youth employment should be the key element of employment policies.

1.18Cooperation between universities and the public and private sectors must be improved; young researchers should be equipped with similar opportunities as of those in the developed countries. The brain drain must be reversed.

1.19The education system must be designed in accordance with the workforce requirements of the enterprises. Turkish youths are not only in competition with their national, but also with their international peers. National and local demands must be identified by the Turkish Employment Agency (İŞKUR). A system concentrating on vocational education should be set up.

2.Youth employment in the European policies (overview)

2.1Within the European Employment Strategy youth has been always the one of the main target groups.

2.2The European Employment Strategy is based on the following pillars:

  • improving employability – improving individual abilities to find employment and ensuring easier access to jobs for unemployed persons and for persons threatened by long-term unemployment
  • developing entrepreneurship through a removal of obstacles and activities promoting the entrepreneurship, which means more new and better jobs
  • encouraging adaptability of businesses and their employees to changing market through lifelong learning and modernisation of work organisation
  • equal opportunities meaning countering discrimination in the labour market, in particular with regard to women and national minorities.

2.3The guidelines of the first pillar are devoted to preventing long-term unemployment and tackling youth unemployment. Therefore every unemployed young person shall be offered a new start before reaching six months of unemployment, in the form of training, retraining, work practice, a job or other employability measures.

2.4In 2000 the Lisbon Strategy was launched. The aim of it is to build the European Union into the most competitive knowledge-based economy in the world. In this strategy special attention is paid to youth and their position on the labour market. The success of the Lisbon Strategy is important for young people, and young people are also important for the success of the Lisbon Strategy. Investing in young people is essential to achieve higher growth and employment rates, continued innovation and stronger entrepreneurship. Their involvement in the strategy and their sense of ownership of and commitment to its objectives are necessary to make Lisbon work.

2.5In its opinions the European Economic and Social Committee has called for the following targets to be considered for youth inclusion in Member States' Lisbon Strategy national reform programmes:

  • Set targets for each Member State to reduce the number of young people unemployed by a minimum of 50% in the period 2006-2010.
  • Develop social protection systems that enable young people to be in a position to make choices to determine their own future.
  • Initiate measures to promote the social inclusion of young people, in particular to combat the problem of young people who are not in education, training, employment or registered as unemployed.
  • Set targets to reduce the gender gap as regards access to vocational and technological training, and reduce wage differences at the time of recruitment.
  • Reduce early school leaving by 50% in the period 2006-2010 and promote work experience in companies.
  • Promote the importance of foreign language competence in improving education and employment opportunities as well as the mobility of young people.
  • Foster young entrepreneurship by providing financial and technical support and by minimising the bureaucracy involved in taking over, transferring and establishing an enterprise.
  • Support regulated, inspected universal early childhood education and care to agreed standards.
  • Provide additional supports to families experiencing disadvantage.

2.6Adoption of the European Pact for Youth by the spring 2005 European Council, as part of the revised Lisbon Strategy focusing on growth and jobs, was recognition that integrating young people in society and working life, and making better use of their potential, are essential for ensuring a return to sustained and sustainable growth in Europe.

2.7Many initiatives concentrated on youth are financed by the European Social Fund; many projects are carried also via programmes such as “Youth in Action”.

3.General comments on Turkey

3.1Turkish labour market – short overview

3.1.1Turkey's main problem is its inability to create enough employment opportunities. The new investment and employment opportunities lagging behind the growth of population have a negative impact on the labour market and impede the proportion of working population to active population.

3.1.2The economic instability, the insufficiency of investments, the non-institutionalised nature of the labour market, the inability of employment creation for the unskilled labour deriving from the agricultural sector, the increase in population growth of working age in comparison with total population growth, the lack of ability of the labour force to meet the needs of the economy, and reasons such as the lack of coordination between the labour market and the education system all show that there is a crucial employment problem in Turkey.

3.1.3During the period 1980 – 2000 annual real GNP growth in Turkey averaged about 4%, compared to an average employment growth rate of only 0.8%. Even in the more recent period of 2002 – 2006 when economic growth rate exceeded 7%, the unemployment rate stubbornly remained unchanged around 10%. Employment growth in the period was also 0.8%.[1]

3.1.4From 1980 to 2003 the working age population increased by 23 million and only six million jobs in that time were created. If Turkey wants to meet the Lisbon targets of the EU it needs to create 13 million jobs by 2010.

3.1.5While the non-institutional civilian population increased by 913,000 and has reached 73,792,000, the non-institutional working age civilian population increased by 874,000 and reached 52,796,000 in the period of October 2007 compared to the same period of the previous year.[2]

3.1.6The number of employed persons decreased by 55,000 compared to the same period of the previous year and reached 22,750,000 in the period of October 2007. Agricultural employment decreased by 225,000 and non-agricultural employment increased by 170,000 in this period. Among the people living in Turkey only two out of three can be employed, this proportion means only one out of two can be employed when we consider the whole population which is able to work

3.1.7Among those who were employed in October 2007: 25.9 % were employed in agriculture, 20.2 % in industry, 6.2 % in construction and 47.7 % in services. Employment in agriculture decreased by 0.9% while that in industry increased by 0.1 percentage points and services increased by 0.8. The share of construction was achieved without any change in the period concerned.

Table 1. Labour force status (October 2007)

TURKEY / URBAN / RURAL
2006 / 2007 / 2006 / 2007 / 2006 / 2007
Non-institutional civilian population (000) / 72 879 / 73 792 / 45 681 / 46 699 / 27 198 / 27 093
Population 15 years old and over (000) / 51 922 / 52 796 / 32 976 / 33 815 / 18 947 / 18 981
Labour force (000) / 25 148 / 25 208 / 15 096 / 15 379 / 10 052 / 9 829
Employed (000) / 22 805 / 22 750 / 13 394 / 13 568 / 9 410 / 9 183
Unemployed (000) / 2 344 / 2 458 / 1 702 / 1 811 / 642 / 647
Labour force participation rate (%) / 48.4 / 47.7 / 45.8 / 45.5 / 53.1 / 51.8
Employment rate (%) / 43.9 / 43.1 / 40.6 / 40.1 / 49.7 / 48.4
Unemployment rate (%) / 9.3 / 9.7 / 11.3 / 11.8 / 6.4 / 6.6
Non-agricultural unemployment rate (%) / 11.9 / 12.3 / 11.7 / 12.1 / 12.7 / 12.8
Youth unemployment rate(1)(%) / 18.8 / 19.8 / 21.4 / 22.2 / 14.8 / 15.6
Underemployment rate (%) / 3.2 / 2.8 / 2.8 / 2.4 / 3.8 / 3.6
Underemployment rate of youth(1)(%) / 3.9 / 3.1 / 2.7 / 2.6 / 5.6 / 4.0
Not in the labour force (000) / 26 774 / 27 588 / 17 880 / 18 437 / 8 895 / 9 152
(1) Population within the 15-24 age group

Source: TURKSTAT

3.1.8In this period, among those who were employed 74.6 % were male, 61.2 % had education below high school, 59 % were regular and casual employees, 27.2 % were self-employed and employer, 13.8 % were unpaid family worker, 61.1 % worked in establishments consisting of 1-9 employees, 2.4 % had an additional job, 3.2 % were seeking a job either to replace their current job or to augment the existing job, 86.8 % of regular employees worked in permanent jobs.

3.1.9The ratio of persons who worked without any social security related to the main job declined to 46.9 % with a 1.7 percentage point decrease. The share of persons who did not have any social security in agriculture decreased from 88 % to 87.6 % and that in non-agriculture decreased from 34.2 % to 32.7 % compared to the same period of the previous year.

3.1.10Labour force participation rate (LFPR) decreased to 47.7 % with a 0.7 percentage points decrease compared to the same period of the previous year for Turkey in the October 2007 period. LFPR was realised as 71.6 % with a 0.4 percentage point decrease for males and decreased to 24.4 % with a 0.9 percentage point decrease for females. LFPR was 45.5 % with a 0.3 percentage point decrease in urban areas and 51.8 % with a 1.3 percentage points decrease in rural areas in this period. As for the distribution of labour force by education and age group:

  • 18.1 % of the total labour force were comprised of persons within the 15-24 age group
  • Labour force participation rate for persons with a below high school education was 46.6 % while that for those with higher education was 78.3 %
  • Labour force participation rate of persons with a below high school education was 71.5 % for males while it was 20.9 % for females
  • Labour force participation rate of persons with high school and equivalent education was 72.6 % for males while it was 31.2 % for females
  • Labour force participation rate of persons with higher education was 83.6 % for males while it was 69.6 % for females.

3.1.11The public sector shows a regression regarding employment creation in recent years due to the enforced economic policies. While 14.4 % (3.1 million)of the total population was working in the public sector in 2000, this proportion was 13.5 %(3.019 million) in 2006. There was a decrease in employment in the public sector in 2006 because of the increase in dismissals as a result of privatisation and the lack of new recruitment as replacementsfor the retired and due to the reduction in public investments.

3.1.12Employment trends of the prime age male population (25-54) in Turkey and the EU are very similar (80% and 85% respectively). The difference lies in the huge disparity in female employment rates. These are very low in Turkey. Female labour force participation fell below 25% in 2006. This is a consequence of the low educational attainment of women.[3]

3.1.13Especially women born in the rural areas, having been unpaid workers in agricultural families, very often stop participating in the labour market after moving to urban areas. Those women who are still active on the labour market are mostly employed informally in low-paid services like house cleaning. This situation lasts until they get married when they drop out of the labour market.

3.1.14Existing unemployment, low wages and low productivity form the basis of inclination to informal employment. The high proportion of employment in the agricultural sector, immigration from rural areas to urban areas, high unemployment, illicit foreign employment, inflation, increase in tax and legal engagements can be considered as the causes of the high proportion of informal employment. Informal employment is especially high among domestic wageless labour, the self-employed and for workers with daily wages.

3.1.15Among those who are mostly looking for opportunities in informal employment, there are women who could not integrate into the labour market due to their qualifications, youth as a result of a lack of productive employment opportunities or those who have difficult living conditions. Those living on limited incomes accept informal employment as a way of increasing their income.

3.1.16Another side of informal employment is that workers are deprived of union rights. Workers in informal employment for various reasons have to work open to exploitation without protection, deprived of negotiation, a lack of labour security and in unfavourable health conditions.

3.2Youth on the labour market in Turkey

3.2.1There are difficulties in Turkey in employment generation in general, in youth employment generation in particular. Turkey had a severe financial crisis in 2001. The recovery started in 2002 and the growth continues to date. Turkey has grown continuously in twenty-one consecutive quarters. The recovery came without jobs in 2002 – 2004, however. In 2005 – 2006, the overall unemployment rate finally started to come down. It was 9.9% in 2006. However, this positive development was not reflected in youth unemployment rates. Youth unemployment rate has stagnated at 17-19% in the past two years. This is the only labour market indicator that Turkey is on a par with the European Union.[4]