We develop an indirect tax microsimulation model, using the 2022/2023 Household Budget Survey, to model how indirect taxes affect Irish households. The modelling accounts for value added tax, specific excise duties on fuel, alcohol and tobacco products, alongside the carbon tax. Our findings indicate indirect tax liabilities are regressive when assessed relative to household income, with a more neutral pattern emerging when comparison is made to household expenditure.
The National Childcare Scheme (NCS) is a government subsidy introduced in 2019 to reduce the cost of formal childcare in Ireland. This research explores the effectiveness of the NCS in achieving this aim by estimating the cost 'coverage' of the subsidy, measured by the ratio of the subsidy to the total cost of care. Using the microsimulation model, SWITCH, linked to 2022 data from the Survey of Income and Living Conditions, we find that the NCS covers 28 per cent of childcare costs on average for eligible families. While the universal component of the NCS has increased over time, most of the parameters of the means-tested component have remained fixed in nominal terms. We carry out a counterfactual simulation, in which the thresholds for the income-assessed subsidy had evolved in line with wage inflation since 2019. We estimate that such indexation would increase coverage to 37 per cent while the cost to the Exchequer would increase by 30 per cent. These results point to the scale of benefit erosion that has occurred due to the nominal freeze to the parameters of the income-assessed subsidy.
This paper aims to identify patterns and drivers of asset decumulation for retired middle-income households in Ireland. The findings reveal that there is little change observed in housing wealth; however there is an increase in financial assets and a significant drawdown in vehicles and other real assets as households age. The effects of changes in long-term health status on households' asset holdings are relatively subdued, while marital status shocks result in a reduction of the probability of owning financial assets, vehicles, and other real assets. Overall, this study sheds light on the implications of these findings for retirement planning and policy.
This paper provides a snapshot of Ireland's greenhouse gas (GHG) emissions using both production-based accounting (PBA) and consumption-based accounting (CBA) approaches. PBA accounts for emissions within Ireland's borders, attributing them to domestic production activities. In contrast, CBA captures emissions embedded in goods and services consumed in Ireland, including those associated with imports, while excluding emissions from exports. Thus, CBA reflects Ireland's global emissions footprint. Comparing CBA and PBA offers valuable policy insights into Ireland's contribution to global emissions. Using GTAP 11 data, the analysis reveals that CBA emissions exceed PBA emissions by 8 per cent to 16 per cent, depending on the treatment of electricity- and cattle-related emissions. The implications of adopting a CBA framework for assigning emissions responsibility vary by sector. For example, emissions from animal agricultures embedded in exports would not be attributed to Ireland under CBA, whereas emissions embedded in imported fuels would be.
In this paper, we examine the impact of the risk of flooding on the credit conditions of nonfinancial corporations in Ireland. Using detailed maps of the likelihood of flood events and geolocated loan data from the AnaCredit dataset, we compare the interest rates and collateral requirements of borrowers with similar characteristics but different levels of flood risk. We find that loans to borrowers in flood risk areas (around 7 per cent of our sample) face an interest rate premium (of roughly 7 to 13 basis points) and are more likely to provide a collateral (between 3 and 7 percentage points). Furthermore, our estimates indicate that the increased flood risk caused by climate change is partially factored in. Although the results suggest that lenders price this important source of climate risk, they also highlight an additional difficulty in obtaining credit for borrowers located in areas susceptible to floods.
