An empirical investigation of the link between economic growth, unemployment, and ecological footprint in Turkey: Bridging the EKC and EPC hypotheses

In the modernized world, stimulating economic growth and employment without endangering environmental sustainability remains a fundamental challenge for developing and newly industrialized economies. This current study investigates the dynamic connections between income growth, unemployment, and environmental deterioration in Turkey within the environmental Phillips and Kuznets curve frameworks. The study employs a novel econometric technique, the augmented autoregressive distributed lag (A-ARDL) model, and examines annual time-series data from 1980 to 2018. To the best of the authors' knowledge, no study has tested the validity of the environmental Phillips curve (EPC) hypothesis (a novel approach linking unemployment with environmental pollution) for Turkey. Another concern with the existing research is that only a few papers simultaneously analyze the EPC and environmental Kuznets curve (EKC) hypotheses and consider the significance of the ecological footprint. Therefore, the study utilizes ecological footprint as an environmental degradation indicator and tests these two hypotheses by setting six models that control renewable energy consumption, natural resource rents, financial development, foreign direct investments, and urbanization to provide more reliable and consistent results. Empirical evidence from the multiple models justifies the validity of both hypotheses in the short and long run. The results also suggest that natural resource rents increase the ecological footprint, while urbanization contributes to environmental quality. Nonetheless, renewable energy, foreign direct investments, and financial development have no significant environmental impact. These outcomes suggest that a rise in employment not accompanied by green energy technologies, higher environmental awareness, a well-educated labor force, and expanded renewable energy utilization may impede the country from attaining its long-term development goals.