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The Short-Term Distributional Impact of Pension Auto-enrolment

Author

Listed:
  • Claire Keane

    (Economic and Social Research Institute and Trinity College Dublin)

  • Seamus O'Malley

    (Economic and Social Research Institute, Dublin)

  • Dora Tuda

    (Economic and Social Research Institute and Trinity College Dublin)

Abstract

The Irish government plans to introduce pension auto-enrolment with an initial employee contribution rate of 1.5 per cent eventually rising to 6 per cent. We examine the immediate distributional, poverty and inequality impacts of an auto-enrolment charge. We find that the bottom two income quintiles will see the smallest fall in disposable income, driven by the fact that only 2 per cent of family units in the lowest quintile and 18 per cent in the second quintile will actually be affected by auto-enrolment. There will be little impact on the at-risk-of-poverty rate. This is explained by the fact that the largest negative impacts on disposable income will be in higher income quintiles.

Suggested Citation

  • Claire Keane & Seamus O'Malley & Dora Tuda, 2023. "The Short-Term Distributional Impact of Pension Auto-enrolment," The Economic and Social Review, Economic and Social Studies, vol. 54(3), pages 173-192.
    • Handle: RePEc:eso:journl:v:54:y:2023:i:3:p:173-192
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    Keywords

    pensions; incomes; Ireland;
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