Utilising Microsimulation to Estimate New Marginal Returns to Education: Ireland 1987-2005

Darragh Flannery and Cathal O'Donoghue

No 5627, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper we utilise microsimulation techniques in the form of an income generation model and a tax/benefit model to estimate both the fiscal and net private return to education at a marginal level. This is carried out empirically using Irish data across the period 1987-2005 and is the first study to utilise these techniques in such a manner. The results indicate that a more generous tax/benefit system, combined with a greater state burden of the cost of education over this period may have helped increase the individual’s return to education, while reducing the state return from investing in education. The methodology employed allows us to specifically analyse the impact of various components of the tax/benefit system upon these returns across time and show the role of income tax changes upon the return to education for the individual and the state.

Keywords: income generation model; microsimulation; returns to education (search for similar items in EconPapers)
JEL-codes: I22 I28 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2011-04
New Economics Papers: this item is included in nep-cmp, nep-edu, nep-lab and nep-pbe
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Citations: View citations in EconPapers (1)

Published - updated version published as 'Utilizing Microsimulation to Estimate the Private and Fiscal Returns to Education: Ireland 1987–2011' in: Manchester School, 2016, 84 (1), 55 - 80

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