Benefit-Cost Analysis of Turkish Social Insurance Institute Gradual Privatization Proposal
AbstractThere 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 42372.
Date of creation: 2005
Date of revision:
Publication status: Published in Journal of Economic Cooperation 4.26(2005): pp. 87-126
social security; privatization; benefit-cost analysis; Social Insurance Institute; SSK;
Find related papers by JEL classification:
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- H0 - Public Economics - - General
- H5 - Public Economics - - National Government Expenditures and Related Policies
- J0 - Labor and Demographic Economics - - General
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
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