Benefit-Cost Analysis of Reforming the Turkish Social Insurance Institution for the Self-Employed (Bağ-Kur)

METU Studies in Development, Vol. 33, pp. 169-206, December 2006

38 Pages Posted: 3 Dec 2009

See all articles by Erdal Gumus

Erdal Gumus

Eskisehir Osmangazi University - Department of Public Finance

Date Written: December 2006

Abstract

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 for Self –Employed Persons, “BK”. Based on data provided by the International Labor Organization, financial projections of the institution were made and extended to apply benefit cost model of privatization. Present value of the change in net social benefit was estimated. The effect of privatization on representative individuals has also been quantified. 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.

Keywords: social security, Bag-Kur, Turkey, privatization, benefit-cost analysis

JEL Classification: H5, H55

Suggested Citation

Gumus, Erdal, Benefit-Cost Analysis of Reforming the Turkish Social Insurance Institution for the Self-Employed (Bağ-Kur) (December 2006). METU Studies in Development, Vol. 33, pp. 169-206, December 2006, Available at SSRN: https://ssrn.com/abstract=1512653

Erdal Gumus (Contact Author)

Eskisehir Osmangazi University - Department of Public Finance ( email )

Meselik Campus
Eskisehir, 26480
Turkey
+222 239 37 50/1751 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
43
Abstract Views
356
PlumX Metrics