The intragenerationally redistributive effects of the retirement insurance scheme in Turkey before and after the 1999 reform


Karayel A.

APPLIED ECONOMICS, vol.38, no.4, pp.441-448, 2006 (Journal Indexed in SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 38 Issue: 4
  • Publication Date: 2006
  • Doi Number: 10.1080/00036840500393001
  • Title of Journal : APPLIED ECONOMICS
  • Page Numbers: pp.441-448

Abstract

The paper analyses the intragenerational redistribution generated by the retirement insurance scheme in Turkey before and after the 1999 reform. Previous research shows that when a pension scheme's contribution and benefit schedules are proportional, the existence of an intergenerational redistribution is a precondition for the existence of an intragenerational redistribution, but that, otherwise, redistribution within a generation is possible without intergenerational redistribution. The main finding of this work is that the existence of the intergenerational redistribution is still a precondition for the old pension scheme despite its disproportional benefit schedule. Under the assumptions used, both of the schemes redistribute from high-wage earners to low-wage earners among women, but redistribute differently among men. Among men, the old scheme generates indeterminable transfers, although the new scheme redistributes from low-wage earners to high wage-earners. The analysis takes into account a hypothetical distribution of wages.