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

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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.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840500393001

Affiliations: Department of Economics, Galatasaray University, 34357 Istanbul, Turkey

Publication date: March 10, 2006

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