A genetic algorithm-based search for parametric reform alternatives for the Turkish pension system : 2005-2060

Abstract

In this thesis, we search for parametric reform alternatives so as to achieve a balance in the long term accumulated difference between pension expenditures and revenues of the SSI, the largest pension fund in Turkey, from 2005 to 2060. The projected worker-retiree composition of the pension system is allowed to change along with proposed policy changes in contribution and replacement rates. These changes in population structure are modeled by estimated work and pension income elasticities of labor supply values so that the resulting changes in the incomes of the worker could now affect the retirement decision. Possible policy alternatives are then found by a genetic algorithm developed for this purpose. Finally, the results obtained from the program are compared with previous and current reform proposals.