| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : Irish Economy Last Updated: Oct 14, 2014 - 8:55 AM


Irish Budget 2015: ESRI budget conference hears work pays better than welfare
By Michael Hennigan, Finfacts founder and editor
Jun 11, 2014 - 9:37 AM

Email this article
 Printer friendly page

Irish Budget 2015: Next year's budget will be officially disclosed on Tuesday October 14th 2014 - - after extensive leaking! - - and the 17th Budget Perspectives Conference underway in Dublin this morning and will discuss a paper on work and welfare in Ireland produced by the ESRI SWITCH team. It provides the results of an in-depth examination of financial incentives to work in Ireland.

The opening session will explore medium-term fiscal challenges from a macroeconomic perspective (Prof John FitzGerald) and the impact of housing market developments on consumption (Kieran McQuinn and Yvonne McCarthy). This year’s guest speaker is Cormac O’Dea from the Institute for Fiscal Studies (IFS, London); his paper looks at the distributional effects of public services spending cuts in the UK.

The "Welfare Targeting and Work Incentives” paper by Michael Savage, Tim Callan, Claire Keane, Elish Kelly and John R. Walsh  confirms that work pays more than welfare for close to 6 out of 7 unemployed people - - even when in-work costs like childcare and travel to work are taken into account.

Among those people in employment or unemployed facing a situation where work pays less than welfare, more than 7 out of 10 choose work rather than welfare. Policy initiatives to improve the reward from work are worthwhile, but will have only a limited impact on overall unemployment. More substantial reductions in unemployment will require a revival of international and national demand, and activation measures providing skills and training in areas where new jobs will arise.

Most of those who receive Jobseeker payments are single and do not have children. Work, even at the minimum wage, pays more than welfare for these groups. For those with families, extra payments for dependent children and in respect of a non-working spouse can mean that the net rewards from work are reduced. But even those who, on a “snapshot” basis, would be “better off on the dole” tend to choose work. The reasons for this include

  • the fact that prolonged unemployment tends to reduce future wages;
  • being in employment provides opportunities for wages to grow;
  • there are non-financial benefits to being in work, including social and psychological benefits;
  • there are also compliance costs associated with welfare payments – such as requirements to attend training and to search for work – and penalties associated with non-compliance.

Research at ESRI identifies Rent Supplement as an aspect of policy which tends to reduce the reward from work, because it is not payable to those in full-time employment. The new Housing Assistance Payment is designed to replace Rent Supplement for many recipients, and to improve the net reward from employment by allowing for a housing-related payment for those in full-time work

Speaking at the conference, Professor Tim Callan said “Policy initiatives to improve the reward from work are welcome, but they cannot be expected to have a major impact on overall unemployment.”

"Can We Measure Who Loses Most From Public Service Spending Cuts?" [pdf], the paper by Cormac O’Dea (Institute for Fiscal Studies, London), looks at the fiscal tightening currently under way in Ireland and elsewhere involves changes to taxes and benefits (i.e. charges and payments to the public in cash) and changes to spending on public services (i.e. transfers to the public in kind).

He says it is possible (and common) to assess how much households with different levels of income are losing from increases to taxes and cuts to benefits. It is much harder, and less common, for researchers to quantify the impact across the income distribution of cuts to spending on public services. As a result while there is evidence on how much increases in income tax and cuts to Jobseeker’s Allowance, for example, have affected households, there is much less evidence on how cuts to spending on public services such as health and education have affected them. The reason for this is that doing so involves tackling questions such as (taking spending on education as an example):

  • How much do households value the provision of education?
  • How much does the quality of education change when the education budget is cut?
  • How much do households value such a change in quality?

O'Dea says that answering these questions is difficult and often controversial. Not tackling such questions, however, will mean that the impact of a large part of the fiscal consolidation on households will be missed.

Irish Budget 2015 Page


© Copyright 2011 by Finfacts.com

Top of Page

Irish Economy
Latest Headlines
Finfacts launches new news site
Irish Farmers & Milk Prices: 'Shackles' off in April; Demanding safety-net in August
Irish pension managed funds returns at over 12% year-to-date in 2015
Irish chartered accountants' salary packages surge 13% in 12 months
Irish services PMI fastest rate since late 2006; Official data up only 2.4% in 12 months
Irish Economy: Tax €893m above target in year to July — €653m from corporation tax
Fact and Fiction: Time to review Ireland's economic statistics?
Irish M&A deals H1 2015: Dutch or UK firm acquires Irish firm for €32.6bn - they are both American
Irish manufacturing PMI strong in July
Irish Economy: Fall in GNP in Q1 2015; GDP rises
Irish Economy 2015: Central Bank lauds strong recovery; Time to start paying down debt
Irish Budget 2016: Ibec demands 20 tax cuts, spending and investment rises
Low pay in Ireland; Lowest social security & corporate taxes in Europe
Ireland vs Greece: Enda Kenny's false claims on growth, taxes and debt
Irish standard of living in 2014 below Euro Area average, Italian level; Prices 5th highest in EU28
Irish goods exports rose a record 30% in April - due to fake tax-related transactions
Mexican tall ship to sail into Dublin on June 17th
Irish industrial production up 20% in first four months of 2015; Construction down 2.6% in first quarter
Irish Economy 2015: ESRI slams return to boom-time pro-cyclical fiscal policy
Irish pension fund returns in average range 1.6% - 1.8% in May 2015
Irish service sector PMI remains strong; Tax avoidance clouds data
Ireland: Official unemployment rate at 9.8% in May; Broad rate at 19% — 440,000 people
Ireland: Fiscal Council warns of dodgy forecasts, no plan; OECD warns of new property bubble
Irish Public Finances: Tax revenue in first five months of 2015 €734m ahead of target
No simple measure of economic progress in Ireland: GDP & GNP defective
Irish manufacturing PMI rises in May; Production up unbelievable 45% in year to March!
ESRI says data volatility hinders Irish economic forecasting; Tax avoidance taboo cause
Ireland at 16 in international competitiveness ranking; US, Singapore and Hong Kong on top
Irish Economy 2015: Sectors to add 200,000 jobs?; Broad jobless rate at 19%
Irish Export Performance: Myths and reality - Ireland is a poor exporter
Irish Economy: 41,300 jobs added in 12 months to Q1 2015 - Construction up 19,600
China-Ireland: Economic relationship on a slow burn
Estonia, Austria, France, Ireland head global alcohol rankings
Irish Exchequer Returns: Tax receipts under target in April but ahead in year
Irish service sector PMI rose in April
Irish manufacturing PMI remained strong in April- includes overseas manufacturing
Irish Live Register + 90,000 activation scheme numbers at 439,000 in April
Ireland: Coalition drops 2018 full-employment target
Ireland Spring Statement: Noonan promises 200,000 net new jobs by 2018
Irish Economy 2015: Retail sales volume up 1.4% in month of March