The Turkish Pension System Further Reforms to Help Solve the Informality Problem

Recent social security reform has significantly improved the long-run sustainability of the pension system. However, the pension system continues to serve as an important barrier to a more rapid expansion of the formal-sector economy in two ways. First, early-retirement incentives (including severan...

Full description

Bibliographic Details
Main Author: Brook, Anne-Marie
Other Authors: Whitehouse, Edward
Format: eBook
Language:English
Published: Paris OECD Publishing 2006
Series:OECD Social, Employment and Migration Working Papers
Subjects:
Online Access:
Collection: OECD Books and Papers - Collection details see MPG.ReNa
LEADER 02524nma a2200289 u 4500
001 EB001833377
003 EBX01000000000000000999823
005 00000000000000.0
007 cr|||||||||||||||||||||
008 180616 ||| eng
100 1 |a Brook, Anne-Marie 
245 0 0 |a The Turkish Pension System  |h Elektronische Ressource  |b Further Reforms to Help Solve the Informality Problem  |c Anne-Marie, Brook and Edward, Whitehouse 
246 2 1 |a Le système des retraites en Turquie : Les réformes supplémentaires pour aider à résoudre le problème de l'informalité / Anne-Marie, Brook et Edward, Whitehouse 
246 3 1 |a Le système des retraites en Turquie 
260 |a Paris  |b OECD Publishing  |c 2006 
300 |a 30 p.  |c 21 x 29.7cm 
653 |a Türkiye 
653 |a Social Issues/Migration/Health 
700 1 |a Whitehouse, Edward 
041 0 7 |a eng  |2 ISO 639-2 
989 |b OECD  |a OECD Books and Papers 
490 0 |a OECD Social, Employment and Migration Working Papers 
024 8 |a /10.1787/348880554402 
856 4 0 |a oecd-ilibrary.org  |u https://doi.org/10.1787/348880554402  |x Verlag  |3 Volltext 
082 0 |a 304 
082 0 |a 610 
520 |a Recent social security reform has significantly improved the long-run sustainability of the pension system. However, the pension system continues to serve as an important barrier to a more rapid expansion of the formal-sector economy in two ways. First, early-retirement incentives (including severance payments) continue to push many incumbent formal sector workers into the informal sector, often at ages as young as 40-45. While new labour force entrants face a much higher retirement age, policies for incumbents are fiscally expensive, inequitable, and serve to swell the ranks of the informal sector. Second, even when the transition to the new pension rules is complete, net replacement rates will remain very high by OECD standards, requiring high social security contribution rates that make it too expensive for firms to employ low-skilled labour in the formal sector. Thus, further pension reform is one of the keys to overcoming Turkey's economic duality. Finally, since the pension system does not cover the informal sector, it does little to alleviate poverty among the wider population of older people. This paper discusses a number of reforms that would increase the retirement age, reduce inter-generational inequities, and permit a significant cut in the tax wedge on labour, while better addressing old-age poverty concerns at all levels of income