Labour demand analysis in the ICT sector: EU countries and Türkiye

Abstract

This paper is dedicated to specific research on the information and communications technologies (ICT) sector, where the variables determine labour demand in the European Union (EU) and Türkiye. The research aims to clarify the relationships between employment-generating firm growth that represents labour demand and the independent variables identified by the authors. For this purpose, our method analyses the factors affecting labour demand econometrically. In the study, a panel data set of 22 countries, including 21 EU countries and Türkiye, is used for the period of 2014-2019. The results show that there is a positive and significant relationship between employment in the ICT sector and real gross domestic product (GDP) per capita and frequency of internet use. In addition, the results show that the relationship between employment and wage level in the ICT sector is negative and significant. According to the results obtained from the Fixed Effects (FE) model, the elasticity coefficients of the independent variables in the model present for wages (1.53), GDP per capita (3.27) and frequency of internet use (1.60). Finally, we have discussed the results estimated by the Shadow Variable Least Squares (LSDV) method to measure the impact of each country on the overall variability in employment level. As a result of the study, when labour demand is associated with firm employment increase, the countries in the target geography where a significant and positive relationship was found are Belgium, Bulgaria, Croatia, Czechia, Estonia, Finland, Germany, Hungary, Italy, Latvia, Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden, and Türkiye.