Dynamic Relationship Between Tourism and Non-Tourism Employment: Evidence from ARDL Bounds Testing

Abstract

Tourism activity interacts with 21 different sectors both directly and indirectly. Our aim is to measure the employment creation effect of tourism and to show its effect on non-tourism labour force. In addition, it is also aimed to reveal whether the increase in employment is sectoral or due to the general growth of the economy. In our study, long and short-run effects on non-tourism employment, tourism employment, tourism incomes and gross domestic product are estimated by ARDL bounds test method with monthly data for the period 2014-2020. The findings indicate the existence of cointegrated relationship in both the short and long run. In the long run, a 1% increase in tourism employment and gross domestic product increases non-tourism employment by 0.29% and 0.46%, respectively, while decreasing tourism incomes by 0.03%. In the short run, 0.26% of the negative shocks arising from tourism employment and gross domestic product can be eliminated within the same period. The results suggest that increasing the number of potential tourism destinations and diversifying tourist activities are effective in reducing seasonal dependence. In addition, adjustments to be made in wages, working hours and other social rights may be effective in keeping more qualified labour in the sector.

Keywords: Employment, Tourism Employment, Tourism Sector, ARDL, Cointegration Test

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