Utilising microsimulation to estimate new marginal returns to education: Ireland 1987-2011

Darragh Flannery and Cathal O'Donoghue

No WP042012, Working Papers from University of Limerick, Department of Economics

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 1987-2011 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 the period 2000-2005 may have helped increase the individualÂ’s return to education, while reducing the state return from investing in education. However, this trend is revered between 2005-2011, as the fiscal crisis in Ireland forces significant changes to the Irish tax/benefit system. 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: returns to education; income generation; tax/benefit; Ireland (search for similar items in EconPapers)
Pages: 37 pages
Date: 2012-06, Revised 2012-10
New Economics Papers: this item is included in nep-eur and nep-pbe
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Forthcoming in Manchester School

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https://ul-econ.github.io/RePEc/pdf/ul-econ-wp-2012-04.pdf Revised version, October 2012 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:lim:wpaper:042012

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