The Relationship Between Social Security Spending and Economic Growth in Turkey: Cointegration Analysis and Granger Causality Test

This study examines the temporal causality relationship in 1975 and 2017 between social security spending and economic growth. This analysis was made using the percentage rate of social security spending in the consolidated budget as social security spending variable and the percental change of the GDP compared to the previous year as an economic growth variable. In this paper, long-term relationships for models were examined through using the Johansen cointegration test, taking part in the works of Johansen (1988), Johansen and Juselius (1990) and Johansen (1991). The existence of a long-term cointegration relationship between the variables was confirmed by this research. It is concluded that every 1-point increase in social security spending results in a 1.05-point increase in economic growth. Granger (1969) causality test was applied to examine whether there is causality between the variables or not. It is decided that social security spending is a motive for economic growth, but economic growth is not the motive for social security spending