Adem Yavuz Elveren

Social Security Reform in Turkey: A Critical Perspective

This article discusses social security reforms in Turkey in the framework of the welfare state, which started to fall in the 1970s as a result of the neoliberal paradigm promoting the interest of the capital class over the interest of the public as a whole. The article analyzes some handicaps of privatization attempts all over the world. The author argues that social security reforms in Turkey toward privatization will result in decreasing the welfare of the poorer strata of society. The author discusses the welfare losses incurred by the increasing nonparticipation of the government, which decreases income certainty for the beneficiary and exposes individuals to the risk of fluctuations in the economy in general and of the stock market in particular. JEL classification: G23, H53, H55

Military Spending and Income Inequality:Evidence on Cointegration and Causality for Turkey,1963–2007

This paper examines the relationship between defence spending and income inequality in Turkey for the period of 1963–2007. Using the Theil Index of pay inequality as a proxy of overall income distribution, this study overcomes the problem of lack of time series data. Utilizing basic cointegration and causality tests, the paper aims to add to the literature by providing evidence that defence spending has an impact on income inequality for the case of Turkey.

Assessing Gender Inequality in the Turkish Pension System

Since the 1990s, the welfare regime in Turkey has become more market-oriented. The introduction of the Individual Pension System (IPS), a privately managed defined contribution scheme, is part of this process. This paper uses an autoregressive stochastic model in order to show the total effect of specific disadvantages, such as a shorter working life, less earnings, longer life expectancy, real wage growth, administrative cost and risk aversion, on the retirement benefits of women in Turkey. Using an actuarial model, the article aims to contribute to the literature by investigating the gender gap in the Turkish defined contribution scheme.

Military Expenditures, Income Inequality, Welfare and Political Regimes: A Dynamic Panel Data Analysis

The goal of this paper is to investigate the relationship between type of welfare regimes and military expenditures. There is a sizeable empirical literature on the development of the welfare state and on the typology of the welfare regimes. There appear to be, however, no empirical studies that examine welfare regimes with special attention to military spending. This study aims at providing a comprehensive analysis on the topic by considering several different welfare regime typologies. To do so, we use dynamic panel data analysis for 37 countries for the period of 1988–2003 by considering a wide range of control variables such as inequality measures, number of terrorist events, and size of the armed forces. We also replicate the same analyses for the political regimes. Our findings, in line with the literature, show that there is a positive relationship between income inequality and share of military expenditures in the central government budget, and that the number of terrorist events is a significant factor that affects both the level of military expenditure and inequality. Also, the paper reveals a significant negative relationship between social democratic welfare regimes and military expenditures.

Does Income Inequality Derive the Separatist Terrorism in Turkey

Separatist terrorism has been a severe problem for Turkey since the mid-1980s. The conventional wisdom contends that economic deprivation in southeastern Turkey is the fundamental reason for the long-running battle against the Kurdish rebels. Considering that there is limited empirical literature on the roots of terrorism in Turkey, yielding conflicting results about the claim that the main cause of terrorism is deprived economic conditions, this study aims to answer whether there is a causal relationship between income inequality and separatist terrorism in Turkey. To this end, the Global Terrorism Data Base for the period of 1973–2006, two Theil indices of pay inequality as proxy for income inequality, and the vector autoregression and Autoregressive Moving Average (ARMA) methods are utilized. The results support the early findings that income inequality, a particular focus in this paper and an essential indicator of economic deprivation, is not a main cause of escalation of separatist terrorism in Turkey.

The impact of military spending and income inequality on economic growth in Turkey

An extensive literature on the effect of military expenditures on economic growth yields conflicting results. However, a crucial issue that has not been investigated in this context is the possible effect of inequality. The impact of military expenditures on economic growth in Turkey has also received substantial attention. Yet, the majority of these studies are not constructed based on a structural model, but rather examine the causality between the variables in question. Considering these two shortcomings in the literature and the lack of consistent results, this study attempts to provide further evidence for the relationship between military expenditures and economic growth for the case of Turkey by considering income inequality within an augmented Solow growth model. Our findings for the 1963–2008 period show that while income inequality has a positive impact on economic growth, military expenditures have no significant effect.

A Minimum Pension Guarantee Application for the Individual Pension System in Turkey: A Gendered Approach

This study examines the minimum pension guarantee (MPG), a promise by government or pension fund management that at retirement, a persons annuitized benefit will be above a prespecified minimum level. For the first time, we use an actuarial model to discuss the role of MPG in lessening the gender gaps in pension incomes in the Individual Pension System of Turkey. Our results reveal that women would be more likely than men to receive pension subsidies and would require larger pension subsidies for every combination of investment decision and years of pension participation if MPGs were implemented.

Women's labour force participation and pay inequality: evidence from panel cointegration

This article examines the relationship between women’s labour force participation and pay inequality for 58 countries for the 1990–2005 period using a panel cointegration analysis. The findings show that while higher women’s labour force participation increases pay inequality in developing countries, it leads to a reduction in developed countries.

Assessing a minimum pension guarantee for the voluntary IPS in Turkey

The returns from individual account pension plans are subject to fluctuations in capital markets. This increases income uncertainty for the beneficiary and exposes individuals to the risk of fluctuations in the economy in general and the stock market in particular. A minimum pension guarantee is a way to avoid this pitfall by providing a minimum annuity regardless of the actual investment performance of individual accounts. In this article, we present a cost analysis of a minimum benefit guarantee mechanism for the voluntary Individual Pension System in Turkey. We examine the cost estimates and the probability of providing guaranteed payments under various economic and demographic assumptions.

Conclusion and Policy Recommendations

This chapter summarizes the main findings of the analysis on the return intentions of the Turkish students and professionals residing abroad, with a special focus on the gender aspect. Then, the chapter discusses the challenges Turkey faces and provides policy recommendations regarding brain drain.