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The Incompatibility of the Pension System and the Labour Market in Turkey

Abstract The Turkish welfare regime has witnessed a rapid transformation over the past two decades. While healthcare and social assistance have been studied in detail, we still know relatively little about the 1999 and 2008 pension reforms and their effects. Instead of examining the Turkish pension system in isolation, this article investigates the institutional compatibility of the pension system and the labour market in Turkey. The need for an institutional compatibility analysis arises because pension entitlements are largely defined by employment status. Based on an analysis of descriptive statistics, laws and other relevant documents, the article argues that neither the pre- nor post-reform pension system is compatible with the labour market structure in Turkey due to low labour force participation, high (youth) unemployment and high informal employment.