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In this study, based on monthly data for the period 2010: 01 and 2019: 11, the effect of Islamic (Participation) Banking usage of funds on employment was analyzed. Solution in the study was realized with Vector Autoregressive Models (VAR) in Greatl program. In the model created for the study, dependent variable is total employment (N), and independent variables are; private sector loans (PSC) of participation banks, household loans (HNK) and total loans (TPLK). In the study, double logarithmic model was used as the econometric model. The solution of the analysis was carried out in the Greatl program. In the analysis, ADF Unit-Root Test, delay length, Cointegration Test, Effect-Response Analysis, Variance Decomposition and Variance Reverse Roots Tests per Unit Circle were used. Result of the study suggests that; there is a negative relationship between PSC and N in the long term, there is no relationship between the two variables in the short term, there is a positive relationship between the HNK and N in the short term, there is no relationship between the two variables in the long term, between TPLK and N. It is also determined that there is a positive relationship in the long run and there is no relationship between the two variables in the short run.

Keywords: İslamic Banking, Participation Banking, Conventional Banking,

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