Impact Of Social Security Expenditures On Income Distribution: Case Of Turkey

Abstract

Income inequality is a significant hindrance to the growth and expansion of social welfare. Modern societies use many tools to overcome this hindrance. Social security system is one of the most known tools. The fact that social security spending improves the income distribution differently in each country, originating from the diversity of social security methods. In this study, the influence of social security expenditure on income distribution in Turkey is examined by Johansen and Juselius (JJ) Cointegration test for the period 1975-2010. The findings of the unit root tests show that all the variables are stationary at first difference and the findings of the cointegration test display that variables have a long run relationship. In addition, it is found that social security expenditure has a negative effect on income distribution in Turkey in the studied period, while economic growth has a positive effect on it.