Electricity Consumption, Employment and Real Income in Turkey

This study examines the relationship between electricity consumption, employment and real income in Turkey by using annual data for the period of 1923-2006 within a cointegration and causality framework. The results are derived from alternative methodologies for the sake of robustness. The results show that electricity consumption, employment and real income are cointegrated in the long-run. Both in the long and short-run, causality runs from employment and real income to electricity consumption. However, in both the real income and employment equations, there exists no causality between variables in the short-run. In other words, economic growth will not promote employment level and policies promoting higher employment level will not increase economic growth in the short-run. These results imply that policies concerning electricity conservation can be carried out without any possible adverse impact on economic growth and employment in Turkey both in the long and short run.