Income Inequality and Public Policy

This paper briefly summarises the evidence that Ireland has a relatively high level of income inequality, which has been rather stable over time and reflects institutional legacies and choices made in the past. A comparative and over time perspective suggests that modest reductions in income inequality are achievable within the framework of Ireland’s current socioeconomic model, but bringing it below the (EU or OECD) average may well be beyond the capacity of that model. The current financial, fiscal and economic crises require very substantial increases in tax revenue and reductions in state spending. The imperative to close the fiscal deficit provides a window of opportunity to restructure the tax system in a fashion that is not only more economically efficient but also more equitable. Another core aim should be to minimise the number experiencing long-term unemployment and thus the long-term impact of the recession on labour market careers. Once the most immediate needs of the situation are met, this context may provide an opportunity to debate fundamental questions about the role of the state, the extent and nature of social provision and its financing, and the broader relationship between economic performance, the Welfare State, and the underlying goals of Ireland’s socio-economic policy.

Changes in income poverty and deprivation over time : a comparison of eight European countries from the mid-eighties to the mid-nineties with special attention to the situation of the unemployed ; this paper was also published as working paper 3 of EPUSE (the employment precarity, unemployment and social exclusion project), Oxford, october 1998

All-over in Europe, unemployment became a growing problem from the mid 1980s to the mid 1990s. Nevertheless, the effects on the economical situation of the unemployed and the whole population are quite different in European countries. In this paper we first give a brief overview over the development of unemployment rates in eight member states of the European Union and over the different reactions to provide the social protection of the unemployed. Therefore we look at the social security expenditures, the level of income replacement for the unemployed and recent social policy reforms concerning them. In the second section of the paper, we examine the development of income distribution and poverty taking different poverty lines into consideration. There is no general pattern neither for the relationship of inequality among the unemployed to the whole economically active population nor for the development from the 80s to the 90s. But one can say that in countries with increasing income inequality also poverty is rising (especially in the UK) and that where inequality among the unemployed is less pronounced the proportions of the poor went down from the mid 80s to the mid 90s (France and Ireland). In nearly all countries the risk of being poor is ernormously high for the unemployed, Denmark is the only exception

Promoting the Well-Being of Immigrant Youth

The well-being of immigrant youth — of the first or second generation — is intimately tied up with their socio-economic status and success; in turn, their success and how immigrant youth relate to the society around them are important elements of social cohesion and well-being for those societies. Institutional settings, in relation to immigrants and to Welfare State structures more broadly, as well as the policies adopted within those settings, vary greatly from one developed country to the next. This opens up the potential for studying key outcomes for immigrant youth in a comparative perspective, and learning about which settings and policies appear to be more versus less effective in promoting their well-being and capitalizing on their potential. This paper sets out a framework for such an analytical exercise, drawing on recent research and monitoring efforts in the related areas of multidimensional well-being, social inclusion/exclusion, and child well-being. It then seeks to place some key findings from the disparate social science research literature on immigration and youth (principally drawing on economics and sociology) within that framework. This serves to bring out both the potential and the difficulties associated with this approach to teasing out “what works” for immigrant youth. In conclusion, the paper points to the major gaps in knowledge and what is required to make progress in learning from disparate country experiences about how best to promote the well-being on immigrant youth.

Equity in the Utilisation of Health Care in Ireland

This paper analyses the extent of equity of health service delivery across the income distribution in Ireland – that is the extent to which there is equal treatment for equal need irrespective of income. We find that almost all services, apart from dental and optician services, are used more by those at the lower end of the income distribution, but that this group also have the greatest need for health care. The comparison of health need to health care delivery across the income distribution without standardising for confounding factors suggests that those in higher income groups receive more health care for a given health status indicating inequity. However, need for health care is highest among the elderly and this group also tend to be at the bottom of the income distribution. Once we standardise for age, sex and location we find that hospital services are distributed equitably across the income distribution, whereas GP and prescription services tend to be pro-poor (used more by those with lower incomes for a given health status) and dental and optician services tend to be pro-rich (used more by those with higher incomes for a given health status).

Disability and Labour Force Participation in Ireland

The extent and nature of participation in the labour market by persons affected by disability has a multitude of direct and indirect effects on their living standards and quality of life, and so is a critical area for investigation and policy concern. This paper seeks to quantify the effects of disability on labour force participation in Ireland for the first time. Using data from the Living in Ireland Survey, 2000 and the Quarterly National Household Survey Disability Module 2002, we look at the relationship between participation and self-reported disability. The results show that those individuals reporting a severely limiting condition have a much lower probability of participation in the labour force than others, and this continues to be the case having controlled for other characteristics such as age, education and marital status. The reporting of such conditions itself may not be exogenous, however, and this is a priority for further research.

WHAT HAS HAPPENED TO REPLACEMENT RATES? ESRI Working Paper No. 76, May 1996

Financial incentives to take up and stay in work, and the impact of the tax and social welfare systems on these incentives, have become a major preoccupation of Irish policy-makers. Recent Budgets have highlighted measures to "reward work" through income tax and PRSI relief for the low paid, and one aim of the expert working group set up to advise on the integration of the tax and social welfare systems is to point towards ways of improving work incentives. Empirical studies of work incentives generally measure the financial incentive facing individuals in the form of replacement rates, the ratio of income when unemployed to income when in work.1 In calculating replacement rates, choices about precisely what is to be included in the numerator or the denominator have to be made and can matter. More fundamentally, though, different approaches to deriving replacement rates, relying on different types of data, can be distinguished and may not tell the same story about the situation at a particular point in time or changes over time. This paper sets out the alternative approaches which have been used to measure Irish replacement rates, compares the pattern they show for these rates over time, and assesses the implications for our picture of how work incentives have evolved and for measurement practice

GINI DP 5: Household Joblessness and its Impacts on Poverty and Deprivation in Europe

Working-age households where no-one is in work have become an increasing focus of policy concern even before the economic crisis, and the EU has included household joblessness in its new poverty reduction target for 2020. This paper focuses on the variation across EU countries in the prevalence of household joblessness and its impact on income poverty and deprivation, and on the implications for the new EU poverty reduction target. It brings out fi rst that there are some divergences across key data sources in the extent of joblessness. The prevalence of household joblessness varies substantially across EU countries, but there is little evidence of a consistent pattern among groupings of countries often categorised together in terms of welfare regime or geographically. In aggregate there is little association between the overall extent of household joblessness in a country and the percentage in relative income poverty or above a material deprivation threshold. At micro level, being in a jobless household has a substantial impact on the likelihood of being in relative income poverty or deprived, but the scale of these impacts is shown to be very much greater in some countries than in others, and to vary between single-adult and multiple-adult households. In most EU countries little more than half the working age adults in jobless households are either income poor or deprived, so including joblessness in the poverty reduction target does make a difference, without a clearly-articulated rationale.

GP Reimbursement and Visiting Behaviour in Ireland

In Ireland, approximately 30 per cent of the population (“medical cardholders”) receive free GP services while the remainder (“non-medical cardholders”) must pay for each visit. In 1989, the manner in which GPs were reimbursed by the State for their medical cardholder patients was changed from fee-for-service to capitation while other patients continued to pay on a fee-for-service basis. Concerns about supplier-induced demand were in part responsible for this policy change. The purpose of this paper is to examine the extent to which the utilisation of GP services is influenced by the reimbursement system facing GPs, by comparing visiting rates for the two groups before and after this change. Using a difference-in-differences approach on pooled micro-data from 1987, 1995 and 2000, we find that medical card eligibility exerts a consistently positive and significant effect on the utilisation of GP services. However, the differential in visiting rates between medical cardholders and others did not narrow between 1987 and 1995 or 2000, as might have been anticipated if supplier-induced demand played a major role prior to the change in reimbursement system.GP Utilisation; Reimbursement; Supplier-Induced Demand; Difference-in-Differences

The changing effects of social protection on poverty

This paper fits within a broader research programme concerned with the processes that link labour market precarity and social exclusion. Labour market insecurity manifests itself most directly in the form of unemployment, and other elements in the programme seek to measure the impact of precarity, and unemployment in particular, on poverty and social exclusion in the eight countries covered. One of the principal concerns of the programme is however the extent to which institutional differences across countries with respect to the labour market and social protection are a significant factor mediating the relationship between labour market precarity and social exclusion. This paper focuses on the effectiveness of cash transfers, the central element of social protection systems, in alleviating the effects of unemployment on income poverty. The structures of social protection systems vary greatly across European Union member states, and in many cases have altered significantly in recent years in response to high unemployment (see Hauser et al, 1998). Using data from the mid-1980s and the mid-1990s for six member countries, the paper compares the effectiveness of different systems in lifting or keeping the unemployed out of poverty, and how this has been affected by the way systems have responded to the challenges produced by developments in the labour market in the past decade. The specific role of social insurance-based unemployment-linked transfers versus other cash transfers is also considered, to assess the extent to which social insurance has been able to cope with changes in the labour market over the period. The data come from a variety of national large-scale household surveys. The paper is structured as follows. Section 2 discusses the data and methods to be employed in measuring the impact of cash transfers on poverty risks for the unemployed. Section 3 looks at the overall risks of poverty for the unemployed before and after cash transfers, and how these changed between the mid-1980s and mid-1990s. Section 4 looks at the role of social insurance-based unemployment payments versus other cash transfers. Section 5 examines the extent to which the impact of transfers varies by gender and by duration of unemployment. Section 6 highlights the key patterns identified and what these tell us about the relationship between the type of welfare regime a country operates and effectiveness in alleviating poverty among the unemployed

RELATIVE POVERTY LINES: AN APPLICATION TO IRISH DATA FOR 1973 AND 1980. ESRI Working Paper No. 4, February 1988

The need to conceive of poverty in developed economies as being relative rather than absolute in nature - with the minimum acceptable income and standard of between different societies and over time Within this general framework, living varying is now widely accepted. the choice of a specific poverty line for a particular society at a particular date is fraught with difficulty. A number of different approaches ta deriving such poverty lines have been developed and were reviewed in the second Working Paper in our series "Concepts of Poverty and the Poverty Line" (Callan and Nolan, 1987)