March 11, 2020 / 3:18 PM / 20 days ago

Surge in jobseekers to test Turkey's strained labour market

* Many stepped back from workforce in face of recession

* With recovery underway, up to 420,000 could return

* Average duration of unemployment at record around 8 months

* Labour market crunch could keep joblessness lofty

By Ezgi Erkoyun and Birsen Altayli

ISTANBUL, March 11 (Reuters) - Hundreds of thousands of people locked out of the workforce by Turkey’s recession are poised to begin looking for a job again, inundating a labour market already strained by those who have been seeking work for longer than ever.

Last year - on the heels of a currency crisis in 2018 - only about half of the usual 800,000 Turks entered the workforce. This left an additional 420,000 - mostly women - on the sidelines waiting for job prospects to improve, according to economists’ forecasts.

As the economy rebounds, their pending return to the labour force could keep joblessness lofty through this year and push the average duration of unemployment further into record territory.

Ayfer Dagtekin, 29, says she will start looking for work in April after her brother’s wedding. A former hospital office clerk in the western province of Aydin, she stopped looking for work in late 2019 after a nearly year-long search.

“In some of the job interviews I was told I am over-qualified even though I requested the minimum wage,” she said. “The economy on its face appears to be getting better, but I don’t think that’s true.”

The rise in those leaving the workforce is partly driven by an unusual jump in Turks who say they are not looking for jobs because of housework - all women, according to official statistics - said Seyfettin Gursel, economist at Istanbul’s Bahcesehir University.

Women who cited household chores as a reason for stepping back from the labour market rose by 362,000 in a year, according to TurkStat, which calls them “housewives”. There was also a 40% jump in those citing discouragement.

Turkey's overall participation rate tmsnrt.rs/2Q790En, at 51.8% in December, is the lowest in nearly three years with only about a third of women in the workforce.

The recent drop-off - especially among women - paved the way for the overall unemployment rate to ease from a 10-year high of 14.7% early last year to 13.7% in the November-January period. Ankara expects it to drop to 11.8% by year end.

But now that Turkey’s economy is shaking off the effects of the crisis and grew a strong 6% rate in the latest quarter, the inactive workforce - including the temporary “housewives” - might begin to look for jobs again.

“It would be unsustainable if all these people were looking for jobs right now,” said Gursel, who is director of the Betam Research Center. He added many left the workforce during the downturn but “this does not mean they gave up.”

‘I FEEL USELESS’

A return of confidence among workers could be good news for President Tayyip Erdogan’s government, which is anxious to leave the brief but sharp recession behind.

Ankara is targeting an ambitious 5% economic growth rate this year, which is what most economists see as necessary to stabilize or bring down unemployment.

The World Bank and International Monetary Fund expect only 3% Turkish growth this year. A global downturn due to the coronavirus spread could derail the recovery in Turkey, which reported its first case of the virus on Wednesday.

The prospect of up to 1.2 million Turks entering the workforce this year could continue to boost the unemployment rate after it edged up tmsnrt.rs/2IAqgOg in the latest period, economists said.

This would be bad news for those already struggling for up to a year or more to find jobs in the wake of the crisis that devalued Turkey’s lira by some 40% since the beginning of 2018.

More than a million people, or 26% of unemployed workers, have searched for a job for more than a year, compared to 20.5% a year earlier. The average duration of unemployment has hit a record of nearly eight months, said Gursel of Bahcesehir University.

Research shows that long-term joblessness can erode skills and confidence, trigger domestic problems and social unrest, and lead to higher public spending to combat persistent poverty.

“I feel useless, why did I complete my university education? My self-confidence is fading,” said Burga, 25, a mechatronics engineer who declined to give a surname for fear of stigma.

He was laid off in the height of the currency crisis in August 2018, when the lira briefly lost half its value against the dollar, and now lives with his parents in Bursa.

“I have been thinking about getting married with my girlfriend for two years now but it is very hard without getting a proper job and saving money for a couple of years,” he said.

Writing by Ezgi Erkoyun; Editing by Jonathan Spicer and Toby Chopra

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