Abstract
RELATIONSHIP BETWEEN LABOR PRODUCTIVITY AND MANUFACTURING INDUSTRY GROWTH RATE
Human capital briefly refers to the qualities of labor. The concept of human capital emerged as one of the important aspects of economic development in 1960s and then its importance on the process of growth and development increased upon the cceleration of knowledge-intensive and technology- intensive production. With the emergence of endogenous growth theories, the relationship between human capital and economic growth has become a theorically debated and emprically tested issue. This study aims to investigate the relationship between labor productivity and the growth rate of manufacturing industry in Turkish economy. In order to identify the relationship, Following the literature, different human capital indicator labor productivity, have been used in this article compared to other studies. Johansen Co-integration methodology and Granger causality analysis has been used. According to the results, a causality relationship between manufacturing industry growth rate and labor productivity has been identified. These results indicate that economic growth, on the one hand, determines the human capital and, on the other, be determined by the indicators of human capital. Considering the results and applied literature, improvement of the manufacturing industry an labor productivity has being understood. They are necessary but not sufficient. As for investments of human capital their contribution to economic development can be possible with the long-term private sector and planned public policies.
Keywords
Productivity, labor productivity, co-integration, granger causality
