New Developments and Beyond
Edited by Jon C. Messenger and Naj Ghosheh
Chapter 5: The Turkish experience with work-sharing policy during the global economic crisis, 2008–2010
In terms of employment vulnerability, Turkey was hard hit by the global financial crisis that began in 2007. The repercussions of the crisis began to be felt by the third quarter of 2008 when the gross domestic product (GDP) decelerated to 0.9 per cent in real terms (annualized). With a further contraction of 7 per cent in the last quarter of 2008, and a historical collapse by 14.9 per cent in the first quarter of 2009, the Turkish labour market faced a severe contraction in demand. The open unemployment ratio increased by almost six percentage points from an average of 9.5 per cent during the summer months of 2008 to a historical high of 16.1 per cent in February 2009. Industrial production felt the burden of adjustment severely as it dropped by 24 per cent in January 2009, and may have reached the pre-crisis levels only by July 2010. In response to the darkening economic conditions, the Turkish government enacted a series of stimulus packages starting in the last quarter of 2008. The first employment package was announced in October 2008, with mostly provisions for reductions in social security premiums and other cost items for the employers.
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