Financial Structure and Funding of Social Insurance

Abstract

Funding a social security system is a complicated subject, which incorporates significantly complex problems, under the economic conditions of Turkey, as in other countries. A significant portion of problems on this subject is related with the sources of income. Accordingly, the ratio of Turkey’s social security expenses including the medical care, social assistance, and pension expenses to the gross domestic product exceeded beyond 11%. Thus, the social security expenses of Turkey are between those of countries having mid-level and high level of income. Similarly, Turkey’s ratio of public pension expenses to the gross domestic product is very high because of the elderly and dependent population. Hence, the ratio of population turned the age 65 years or higher to the population aged between 20 and 64 years is 10% in Turkey, whereas the ratio of public pension expenses to gross domestic product is about 6%.