Information technology in Turkey: Creating high-skill jobs along with more unemployed highly-educated workers?

• Domestic IT production growth is correlated with changes in unemployment rates.
• In general, effect depends on age, gender, educational level, economic environment.
• Need to consider change in workforce sizes while interpreting unemployment rates.
• Negative impact on lower-skill categories, university level workforce increases.
• Need to coordinate educational policies with policies promoting IT growth.

We measure the impact of the growth in ICT sector in Turkey on unemployment rates using domestic IT production and total ICT market-size based variables as proxies, from 1990 to 2013, and the sub-period 2000–2013 of rapid ICT growth. Results show that changes in youth and female unemployment rates are correlated positively with growth of domestic IT production. Within educational subcategories, the correlation is positive and significant especially for youth females at lower educational levels; and negative at the vocational high school level, especially for youth male. At the same time the growth in number of individuals employed as well as workforce size are correlated positively with growth in domestic IT production for male youth at the university level, and negatively at the vocational high school level for females. The youth workforce composition changes significantly during the period of our study. Data suggests that growth in domestic IT production is correlated with more youth undertaking university education and that although additional jobs are created, especially for males, the number of unemployed youth with university degrees also increases. We examine these results in the context of Turkish educational policy changes and discuss the need for coordinating these with policies promoting ICT.