For the last two decades, Turkey's welfare system has changed exponentially. Once "being a social state" was just a provision in the Turkish Constitution, which had no determining value in the real world. But now the country has turned into being an interesting experiment of the welfare state.
Statistics show this great change: Turkey's per capita healthcare expenditure with the current purchasing power parity (PPP) has increased from $470 in 2002 to $1,088 in 2016, according to the Organization for Economic Cooperation and Development (OECD).
The total contributory and non-contributory retirement payments of the country have increased from TL 46 billion ($11.01 billion) in 2007 to TL 185 billion as of 2016.
Once only 69 percent of the society was under the protection of Turkey's social security system but that has reached 99.2 percent in 2018. As a result of the increase in accessibility to qualified healthcare and decrease in mortality rates, Turkey's average life expectancy at birth increased to 80.7 for women and 75.3 for men by 2015, from well below 65 for both women and men in the late 1990s.The OECD confirms that in the years following the great recession of 2008-2011, only in Turkey, Chile and Mexico, the inequality indicators have shown improvements. According to the Turkish Statistical Institute (TurkStat), the Gini Coefficient of Turkey at the disposable household income improved from 0.45 in 2002 to 0.40 by 2016.
As I have elaborated in my previous commentaries, this transformation in welfare policies is a key aspect for understanding Turkish Politics. The expansion of social welfare in the country not just improved the daily lives of the most vulnerable sections of the society, but also determined the country's political atmosphere.
Social policies have played a critical role in bonding the electorate strongly to the ruling Justice and Development Party (AK Party) for the last two decades – both in the emotional and material sense. These policies instrumentally affected the voting behavior of the biggest portion of the Turkish electorate, and voters are still strategically and rationally voting for the continuation of the AK Party.
Turkey's social protection budget is expanding
TurkStat's recent statistics confirm the transformation of the Turkish welfare regime and shows how Turkey has kept expanding its social transfer budget, despite global financial fluctuations. The statistics body regularly publishes data regarding social protection expenditures of the country, in-line with the European Integrated Social Protection Statistics System, which covers all ranges of welfare expenditures (including expenditures for health, disabled, elderly, widows, family, housing, employment and social inclusion) that are made both by the public (central and local), private and volunteer sectors.
The recent statistics show that Turkey has increased its total social protection expenditure by 19.5 percent in 2016 to TL 334.75 billion when compared to TL 280 billion in 2015. Looking into the details, 98.3 percent (TL 328.92 billion) of this expenditure consists of social protection benefits. The largest expenditure item was on pensions with TL 162.2 billion handed out to more than 12.8 million pensioners in the country. This is being followed by healthcare expenditures at TL 91.4 billion.
The increase is not just on the crude numbers. When assessed as a percentage of the country's gross domestic product (GDP), the share of social protection expenditures as a share of the GDP was 12.8 percent in 2016. This is a significant increase when compared to 2015 (12 percent). This rate was 5.6 percent in 1995 and 9.7 percent in 2005. On the basis of risk/need groups, it is seen that retirement/old-age is getting the biggest share with 6.2 percent. This was followed by healthcare spending with 3.5 percent and widow/orphan spending with around 1.5 percent.
When we go further analyze the details, we see that the largest share of conditional benefits was disability benefits, at 32.1 percent. This was followed by 31.9 percent family/child benefits and healthcare benefits with 17.2 percent. Another important piece of data was that around 67.8 percent of social protection benefits were provided in cash.Additionally, it has to be underlined that government contributions account for around 40.7 percent of the total social protection expenditure, of which 27.7 percent come from social contributions of the employers while 26.5 percent comes from contributions made by protected individuals.
Turkey's place among welfare clusters
What these statistics are telling to us can be divided into three main points. First, statistics show that Turkey's welfare regime is getting distinct features from the taxonomy of welfare states year by year. Traditionally, Turkey is being classified among the Mediterranean family of Welfare States.
Yet, the recent explosion in public welfare signifies that the country's welfare model is receding from its traditional place and approaching a more social democratic model when assessed with the classical premises of Esping-Andersen. This is truer given the country is implementing more and more universal-based, generous, in-cash and diverse public welfare allocations, alongside expanding the total expenditure. This is a very important change.
Secondly, Turkey's welfare model is still primarily based on the contributory Bismarckian social insurance model. Around 47.7 percent of the total social expenditure is for pensions, and a big chunk of the money is coming from employee and employer contributions. This means that the financial model is less vulnerable to budgetary limitations of the public. Additionally, this signifies that prospective labor market restructuring is quite important for the future of the country's welfare model.
Lastly, Turkey is showing a continuous expansion of welfare allocations since the recession of 2008-2011. Despite its social expenditure as a percentage of the GDP is quite low compared to the OECD and European Union averages, the country is maturing its welfare state in a continuous trend, by applying interesting new policy experiments. However, the sustainability and efficiency of this maturing welfare regime is a topic for another discussion.
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