Factors used to explain the increase in agricultural employment apply in the regions experiencing a fall in agricultural employment, as well.

Upon the debates on the increase agricultural employment Seyfettin Gürsel's commentary was published in Radikal daily on Tuesday. He, in his commentary, defined the increase as a puzzle and summarized the results of the research he and two scholars conducted (S. Gürsel, Z. İmamoğlu and T. Zeydanlı, "Puzzle of Agricultural Employment", Betam, October 21, 2010).

At the same day the said research was published, ı wrote a commentary at this column which drew attention to the increase in agricultural employment. Therefore, the commentary by Mr. Gürsel attracted my attention and I read the Betam note to get to know how the puzzle was solved.

The research maintains that agricultural employment can increase for two reasons which do not externalize each other. First is the rise in (expected) agricultural income. Given the problems facing other sectors due to the crisis for instance, rise in agricultural incomes leads to a centre of attraction. Second, if employment opportunities in other sectors narrow down, young population postpones migrating to urban areas.

The research analyses three factors: Has agricultural incomes increased? Has employment opportunities in other sectors (non-agricultural employment) increased? Has young population grown? Agricultural employment increases in 18 of 26 regions in Turkey. Out of the 18 regions, 12 enjoy a rise in income while the other 6 face fall in income. However, 2 of these regions also experience an increase in young population. Therefore, 14 out of 18 observations (kind of) are explained with the factors proposed in the research.

Out of 8 regions where agricultural employment decreased, income increased but employment decreased in 6 regions. The researchers argue that in 7 out of 8 regions employment has increased in other sectors and thus there might have occurred a shift to these sectors from agricultural sector. And they maintain that this is possible if the expected rise in income is higher in other sectors then the agricultural sector.

I do not think that these findings have solved the puzzle we have been dealing with. I could provide several examples from the study; but I will take a look at the regions which have a high share in cereals, having a substantial lead in Turkey's agricultural value added. As Table 1 suggests, agricultural employment increases in Regions 1 and 2. Gürsel et al associate this with the rise in agricultural income.

Table 1. Income and employment in selected regions

Source: Table 3 in the mentioned research.

In the 3^rd, 4^th and 5^th regions agricultural employment falls despite the rise in agricultural income. To explain this conflicting situation, authors address the second factor. They argue that employment opportunities in other sectors expanded shifting the preferences away from the agricultural sector. However, employment opportunities in other sectors have expanded also in the first two regions. And in fact, the biggest expansion is observed in the first region, namely in Konya and Karaman provinces. There is more. The authors explained the rise in employment in regions where income stagnated whereas agricultural employment increased through the growing of young population. However, young population grows in the first and the second regions and drops in the last three regions.

In short, factors used to explain the increase in agricultural employment apply in the regions experiencing a fall in agricultural employment, as well. What is more, these regions constitute a substantial part of agricultural value added. The factors highlighted by the authors might be of great importance; however, the mentioned results do not validate this. Maybe the authors must analyse the issue in more detail.

I would like to thank the named economists for carrying out this research and giving us the chance to discuss the issue on this basis. After all, you cannot find the time to research all issues you are interested in and thus settle with just bringing up the issue. We are lucky to have research institutes like this.

This commentary was published in Radikal daily on 28.10.2010