Gumus, Erdal (2005): Benefit-Cost Analysis of Turkish Social Insurance Institute Gradual Privatization Proposal. Published in: Journal of Economic Cooperation , Vol. 26, No. 4 (2005): pp. 87-126.
Download (519Kb) | Preview
There has been consideration of alternative social security financing methods throughout the world during the last two decades. One alternative adopted in several countries is the privatization of so-called pay-as-you-go financing systems. The purpose of this study is to estimate social benefits and social costs associated with a Feldsteinian-type gradual privatization of the Turkish Social Insurance Institute, SSK. Based heavily upon data provided by the International Labor Organization, financial projections of the institution were made and extended to apply benefit-cost models of privatization. Present values of the change in net social benefit were estimated. The effect of privatization on representative individuals has been quantified. Sensitivity analyses were conducted to determine the robustness of the estimates. Benefit-cost results indicate that social benefits associated with a privatization alternative exceed the social costs even after adjustments for changes in key parameters that reduce social net benefits. However, privatization affects current representative individuals so negatively that it may constitute a good political reason to be against, rather than in favor of, choosing privatization.
|Item Type:||MPRA Paper|
|Original Title:||Benefit-Cost Analysis of Turkish Social Insurance Institute Gradual Privatization Proposal|
|Keywords:||social security; privatization; benefit-cost analysis; Social Insurance Institute; SSK|
|Subjects:||H - Public Economics > H5 - National Government Expenditures and Related Policies > H55 - Social Security and Public Pensions
H - Public Economics > H0 - General
H - Public Economics > H5 - National Government Expenditures and Related Policies
J - Labor and Demographic Economics > J0 - General
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J26 - Retirement; Retirement Policies
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor
|Depositing User:||Erdal Gumus|
|Date Deposited:||03. Nov 2012 15:19|
|Last Modified:||13. Feb 2013 02:26|
Akalin, G. (1999). “Sosyal Güvenlik Sistemimiz: Sorunlar ve Cözüm Önerileri,” Liberal Dusunce Toplulugu (Association For Liberal Thinking) 18, 29 September 2000 <http://www.liberal-dt.org.tr/dergiler.htm>.
Alessie, R., and Kapteyn, A. (2001). “Savings and Pensions in The Netherlands,” Research in Economics 55, 61-82.
Alper, Y. (1999). “Yeni Bir Yüzyıla Girerken Yeniden Yapılanmanın Eşiğindeki Sosyal Güvenlik,” Çimento İşveren Dergisi 3 (13), 10-35.
Attanasio, O. P., and Paiella, M. (2001). “Households Savings in the U.S.A.,” Research in Economics 55, 109-132.
Aydin, U. (1998). “Sosyal Güvenlikte Özelleştirme Sebepler ve Uygulamalar,” Çimento İşveren Dergisi 5 (12), 4-17.
Baker, D. (1998). “Critiques about Social Security Privatization,” Washington Post, 23 December.
Barro, R. J. (1974). “Are Government Bonds Net Wealth?” Journal of Political Economy 82, 1095-1117.
Barro, R. J. (1978). The Impact of Social Security on Private Saving: Evidence from the U.S. Time Series, Washington, D.C.: American Enterprise Institute for Public Policy Research.
Barros, D. (1979). “Private Saving and the Provision of Social Security in Britain 1946-75,” Von Furstenberg, 229-255.
Bovenber A. Lans and Sorensen P. Birch. (2003). “Improving the Equity-Efficiency Trade-Off: Mandatory Savings Accounts for Social Insurance,” CESifo Working Paper No: 1041, September.
Browning, E. K. (1987). “On the Marginal Welfare Cost of Taxation,” American Economic Review 77 (1), 11-23.
Centel, T. (1997). Sosyal Güvenlikte Yapısal Değisim, Istanbul: Şahinkaya Matbaası.
Coronado, J. L. (1997). “The Effects of Social Security Privatization on Household Saving: Evidence from the Chilean Experience,” Staff Working Paper, Washington, D.C.: Discussion Series Division of Research and Statistics and Monetary Affairs, Federal Reserve Board.
Çavuşoğlu, S. (1998). “Financial Implications of Pension Reform in Turkey,” Diss. Boston University.
Denny, M., and Rea, A. S. (1979). “Pensions and Saving in Canada,” Von Furstenberg, 135-165.
Dixon, J. (1999). Social Security in Global Perspective, Connecticut: Praeger Publishers.
Ercan, M., and Gökçe, D. (1998). “Defined Contribution Model: Definition, Theory and an Application for Turkey,” ISE Review 2 (7-8), 33-49.
Feldstein, M., and Samwick, A. (1999). “Maintaining Social Security Benefits and Tax Rates through Personal Retirement Accounts: An Update Based on the 1998 Social Security Trustees Report,” NBER Working Paper No. W6540, Cambridge, MA: National Bureau of Economic Research.
Feldstein, M., and Samwick, A. (1998). “The Transition Path in Privatizing Social Security,” in Martin Feldstein, ed., Privatizing Social Security, Chicago: University of Chicago Press, 215-260.
Feldstein, M. (1997). “The Case for Privatization,” Foreign Affairs, July/August, 24-38.
Feldstein, M. (1996a). “The Missing Piece in Policy Analysis: Social Security Reform,” American Economic Review 86 (2), 1-14.
Feldstein, M. (1996b). “Social Security and Saving: New Time Series Evidence,” National Tax Journal 49 (2), 151-164.
Feldstein, M. (1995). “Tax Avoidance and the Deadweight loss of the Income Tax,” NBER Working Paper No. 5055, Cambridge, MA: NBER, 1-41.
Feldstein, M. (1978). “Reply,” in Robert J. Barro, The Impact of Social Security on Private Saving: Evidence from the U.S. Time Series, Washington, D.C.: American Enterprise Institute for Public Policy Research.
Feldstein, M. (1974). “Social Security, Induced Retirement and Aggregate Capital Accumulation,” Journal of Political Economy 82 (5), 905-26.
Fisunoğlu, M. (1998). “Prospects for Private Pension System and Their Relation to the Stock Market in Turkey,” ISE Review 2 (7-8), 91-104.
Gramlich, E. M. (1990). A Guide to Benefit-Cost Analysis, 2nd ed. Englewood Cliffs, NJ: Prentice-Hall.
Gultekin, N. B., and Logue, D. E. (1979). “Social Security and Personal Saving: Survey and New Evidence,” Von Furstenberg, 65-132.
International Labor Office. (1995a). Model Results: Basic Scenarios and Options interim Report Part 1 – Main Report, Geneva: December.
International Labor Office. (1995b). Model Results: Basic Scenarios and Options interim Report Part 2 – Statistical Annexes, Geneva: December.
International Labor Office. (1996a). Social Security Final Report, Geneva: March.
International Labor Office. (1996b). Supplementary modelling report, Geneva: June.
IMF. (2000). Turkey: Selected Issues and Statistical Appendix, Staff Country Report No: 00/14. Washington, D.C.: IMF Publication Services, February.
Kotlikoff, L. J. (1996). “Privatization of Social Security: How It Works and Why It Matters,” In James M. Poterba ed. Tax Policy and the Economy, Cambridge, MIT Press for the National Bureau of Economic Research 10, 1-32.
Markowski, A., and Palmer, E. E. (1979). “Social Insurance and Saving in Sweden,” Von Furstenberg, 167-228.
Meguire, P. (1998). “Comment: Social Security and Private Savings,” National Tax Journal 51 (2), 339-358.
Mithchell, O. S. (1996). “Administrative Costs in Public and Private Retirement Systems,” NBER Working Paper No. 5734, Cambridge, MA: NBER, 1-51.
Mitchell, O. S., and Zeldes, S. P. (1996). “Social Security Privatization: A Structure for Analysis,” AEA Papers and Proceedings 86 (2), 363-367.
OECD. (1998). The Tax/Benefit Position of Employees 1997, 1998 Edition, Paris: OECD.
Oudet, B. A. (1979). “Data and Studies on Saving in France: A Survey,” Von Furstenberg, 257-276.
Hurler, P., Dennerlein, R., and Pfaff, M. (1979). “Old-Age Security and Saving in the Federal Republic of Germany,” Von Furstenberg, 277-312.
Sayan, S., and Kenc, T. (1999a). “Long –term Consequences of Rehabilitating a Financially Troubled pension System: An Overlapping Generations, General Equilibrium Analysis for Turkey,” Economic Research Forum Working Paper No: 9914, Cairo ERF, 1-33.
Sayan, S., and Kenc, T. (1999b). “Demographic Shock Transmission from Large to Small Countries: An Overlapping Generations CGE Analysis,” August 1999 Version, Forthcoming in the Journal of Policy Modeling.
Sayan, S., and Kiraci, A. (2001a). “Parametric Pension Reform with Higher Retirement Ages: A Computational Investigation of Alternatives for a Pay-As-You-Go Based Pension System,” Journal of Economic Dynamics and Control 25 (6-7), 951-966.
Sayan, S., and Kiraci, A. (2001b). “Identification of Parametric Policy Options for Rehabilitating a Pay-As-You-Go Based Pension System: An Optimization Analysis for Turkey,” Applied Economics Letters 8 (2), 89-93.
Sayan, S., and Teksoz, A. T. (2001). “Simulation of Benefits and Risks After the Planned Privatization of Pension System in Turkey: Is the Expected Boost to Financial Markets Feasible,” Forthcoming in Russian and East European Finance and Trade. State Planning Organization. “Social Security Reform in Turkey,” Unpublished Government Document. Schulz, J. (2000). “The Risks of Pension Privatization in Britain,” Challenge, (Jenuary- February), 93-104.
Tuncay, C. (2000). “Bireysel Emeklilik Rejimi Uzerine,” Cimento Isveren Dergisi 2 (14), 3-16.
Tuncay, C. (1998). “TUSIAD’in Sosyal Guvenlik Raporunun Ardindan,” Cimento Isveren Dergisi 1 (12), 1 November 2000 <http://www.cmis.org.tr/cmis/dergi/1mak981.htm>
TUSIAD (1997). Türk Sosyal Güvenlik Sisteminde Yeniden Yapilanma, Yayin No: TUSIAD- T/97- 10/217, Istanbul.
Undersecretariat of Treasury. (1999). Republic of Turkey social security and Health Insurance Reform Project: Study B Final Report, Unpublished government document, Ankara.
Von Furstenberg, G. M., (1979). ed. Social Security versus Private Saving, Massachusetts: Ballinger Publishing Company.