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In-work transfers in good times and bad - simulations for Ireland

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  • Olivier Bargain
  • Karina Doorley

Abstract

In-work transfers are often seen as a good trade-off between redistribution and efficiency, as they alleviate poverty among low-wage households while increasing ?nancial incentives to work. The present study explores the consequences of extending these transfers in Ireland, where support for low-wage households has been of limited scope. The employment and poverty effects of alternative policies are analyzed thanks to counterfactual simulations built using a micro-simulation model, the Living in Ireland Survey 2001 and labour supply estimations. Firstly, we study the effect of recent extensions of the existing scheme, the Family Income Supplement (FIS), and of its replacement by the refundable tax credit in force in the UK. Secondly, little is known about the impact of macro-level changes on the distribution of resources at the household level, which is particularly relevant in a country deeply affected by the current economic downturn. We suggest a preliminary analysis of the capacity of alternative in-work transfer scenarios to cushion the negative impact of earnings losses and cuts in the minimum wage.

Suggested Citation

  • Olivier Bargain & Karina Doorley, 2009. "In-work transfers in good times and bad - simulations for Ireland," Working Papers 200930, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:200930
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    File URL: http://hdl.handle.net/10197/2628
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    Cited by:

    1. Olivier Bargain & Claire Keane, 2010. "Tax–Benefit‐revealed Redistributive Preferences Over Time: Ireland 1987–2005," LABOUR, CEIS, vol. 24(s1), pages 141-167, December.
    2. Olivier Bargain & Karina Doorley, 2009. "In-work transfers in good times and bad - simulations for Ireland," Working Papers 200930, School of Economics, University College Dublin.

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    More about this item

    Keywords

    Microsimulation; Working poor; Labour supply; Take- up; Statistical matching; Working poor--Ireland; Labor supply--Ireland; Households--Economic aspects--Ireland;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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