Redistribution in the Irish Tax-Benefit System
The primary objective of the thesis is to study the degree of redistribution in the Irish Tax-Benefit System. The first part of the thesis (chapter 2) describes the main features of the system and examines the potential redistributive effect of the system. It also sets the system in its historical context by charting the development of the system in the post war era. Chapter 3 examines the redistributive effect of the sub-components of the tax-benefit system separately on a cross-section of the population by decomposing standard redistributive and progressivity measures. This chapter examines in detail the effect of the reforms from 1987 to 2000. The use of a short accounting period such as a month will tend to exaggerate the degree of redistribution within a tax-benefit system. It is desirable therefore to examine the degree of redistribution over a measure such as lifetime income, as this more fully reflects the standard of living an individual faces. As lifetime income data is not available, a dynamic microsimulation model has been constructed to generate synthetic life histories of a sample of the Irish population, so that lifetime incomes can be constructed. A number of chapters then describe the characteristics of this model. Chapter 4 considers the main issues involved in designing a dynamic microsimulation model and assesses how the main dynamic models internationally have dealt with the issues discussed. Chapter 5 describes how this model dealt with these design issues. Chapters 6 and 7 respectively describe the behavioural equations used by the model to simulate demographic/education and market behaviour respectively. A number of analytical chapters have been included using the dynamic microsimulation model. Chapter 8 examines the degree of redistribution over life-cycle. Chapter 9 analyses the redistributive effect of taxes and benefits over the lifetime. Chapter 10 examines the degree of intra versus inter personal redistribution in the tax-benefit system. The previous chapters examine the redistributive effect of the tax-benefit system in isolation by considering its effect in a steady state world. However neither the world nor the tax-benefit system are in a steady state. The system has evolved over time. In Chapter 11, we examine the degree of inter-generational redistribution of the Irish Welfare State since the foundation of the state in 1921.