Reforms and Challenges: The Turkish Pension Regime Revisited

Abstract

ABSTRACT:The financial crisis of 2008 and the ongoing economic turmoil in Southern European countries pose significant challenges to many welfare regimes and their pension systems. This paper analyzes the Turkish pension system and pension reforms in relation to welfare regime discussions in the literature. Via the application of the hierarchical cluster analysis to the Organization for Economic Cooperation and Development data, this study shows that, supporting previous comparative studies, the Turkish pension regime can be characterized as a part of the Southern European welfare regime, and the 2006 pension reforms were implemented mainly to achieve a recalibration of the Turkish pension system. This paper asserts that although important improvements have been made toward achieving a sustainable and fair pension system, the Turkish pension system still has some structural problems with respect to intergenerational equity.

Between Risks and Opportunities: Social Policies in Contemporary Turkey

“…Researchers have also studied and conducted comparative research on other parts of the world, especially post-Soviet countries or eastern Europe (Deacon 2000 ), East Asia (Gough 2001;Walker and Wong 2005), and the Middle East (Jawad 2009;Aybars and Tsarouhas 2010), which often have diverse historical and institutional characteristics that affect welfare distribution. In welfare regime classifications, some comparative studies analyse Turkey under the southern European or Mediterranean welfare regime (Gough 1996;Bugra and Keyder 2006;Gal 2010;Aysan 2013), while others consider it to be part of the Middle Eastern group (Aybars and Tsarouhas 2010). Whether it is considered a member of these groups or not, the Turkish welfare regime has undergone substantial transformations since 2000.…”

“…These cliental relations have been strengthened by ongoing political tensions among political parties and ideologies as well as by weak political institutions, especially in the 1980s and 1990s. For example, the decision to lower Turkey's official retirement age in 1992 was a populist move that negatively affected the long-term sustainability of the pension system and public budget (Aysan 2013). In cases like these, despite financial risk in the long term, politicians use populist policies to gain a majority of electors' votes for upcoming elections.…”

“…Pension income is provided by the state for those who have paid oldage pension premiums. Pension benefits are central instruments that help the state distribute welfare (Aysan 2013). The Turkish state plays a more active role in the welfare of older people than of other age cohorts.…”

“…Third, new social risks, particularly changes in family formation and gender roles, pose important challenges to welfare regimes (Pierson 2007, 222-223). Welfare in Turkey has traditionally been distributed on the basis of the gendered division of labour in the family, reproducing the well-known male-breadwinner model (Aysan 2013). Men have been responsible for meeting the economic needs of the household, while women have been responsible for unpaid domestic labour and caring for children and older people (Aysan and Aysan 2016, 43).…”

“…This short chapter offers a modest step in this direction, focusing on the social policies of Turkey since the 2000s. It is based on a nation-wide empirical study (N: 1630) entitled "Understanding the Welfare Regime of Turkey: Institutions and Individuals" (Aysan 2016a). This study aimed to understand the effects of various welfare players, particularly social policy institutions, on welfare distribution and citizens' welfare perceptions and satisfaction levels.…”