Identification of parametric policy options for rehabilitating a pay-as-you-go based pension system: an optimization analysis for Turkey
AbstractPublicly managed pension systems operating on the basis of pay-as-you-go (PAYG) schemes face financial difficulties worldwide. The expenditure-revenue balances of such a system are determined jointly by the selected configuration of system parameters, and interrelated developments in the labour market and demographic structure. In a country where pension coverage is compulsory, these developments occur completely beyond the control of pension system administrators implying that any imbalances that may arise over time can be corrected only by adjusting the existing configuration of contribution and replacement rates, and minimum retirement ages. It can be shown, however, that there are infinitely many configurations of these system parameters that could be used to maintain a selected intertemporal balance between the amounts of contributions collected from workers and pensions paid to the retirees. This paper describes an algorithm developed to identify all possible configurations compatible with this goal and illustrates its use with reference to the pension reform debate in Turkey, a country whose PAYG-based pension system already faces a severe financial crisis despite a relatively young workforce/population. The results indicate that for contribution and replacement rates to remain around their current values, the minimum retirement age must be increased substantially.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 8 (2001)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEL20
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Kayam, Saime S. & Parkın, Mehmet Koray & Çeliktopuz, Merih, 2013. "Features that influence the exit decision from the private pension system in Turkey," MPRA Paper 50933, University Library of Munich, Germany.
- Gumus, Erdal, 2005. "Benefit-Cost Analysis of Turkish Social Insurance Institute Gradual Privatization Proposal," MPRA Paper 42372, University Library of Munich, Germany.
- Sayan, Serdar & Kiraci, Arzdar, 2001. "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, Elsevier, vol. 25(6-7), pages 951-966, June.
- Gumus, Erdal, 2008.
"Türk Sosyal Güvenlik Sisteminin Değerlendirilmesi ve Sosyal Güvenlik Kurumlarının Finansal Geleceği
[An Evaluation of Turkish Social Security Reform Process and Its Financial Future]," MPRA Paper 42160, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.