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Assessing the Impact of Pensions Policy Reform in Ireland: the Case of Increasing the Pension Age


  • Cathal O'Donoghue

    (Department of Economics, National University of Ireland, Galway)


Although demographic ageing will affect Ireland later than many EU countries, by 2050 it will result in significant pressures on the public pension system. Recent reform in Ireland has attempted to address these pressures by increasing the incentive to save for retirement and by introducing partial funding for existing Pay As You Go (PAYG) public servant and state pension schemes. Attempts have also been made to improve the poverty effectiveness of public policy instruments. Although there have been substantial policy interventions to increase the labour supply of groups such as married women, lone parents and the long-term unemployed, there has been little emphasis on increasing the labour supply of older workers. This paper uses a new dynamic microsimulation model to simulate life-course demographic and labour market histories for a cross-section of the Irish population. These simulated life-histories are then be used to simulate pension and other public policy at the micro-level for the Irish population. We use the model to assess the implications for budgetary and social policy objectives (poverty reduction and income smoothing) of raising the effective retirement age.

Suggested Citation

  • Cathal O'Donoghue, 2004. "Assessing the Impact of Pensions Policy Reform in Ireland: the Case of Increasing the Pension Age," Working Papers 0074, National University of Ireland Galway, Department of Economics, revised 2004.
  • Handle: RePEc:nig:wpaper:0074

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    References listed on IDEAS

    1. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January.
    2. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
    3. Tim Callan & Brian Nolan, 1990. "Income Distribution and Redistribution: Ireland in Comparative Perspective," Papers WP017, Economic and Social Research Institute (ESRI).
    4. Bjorklund, Anders, 1993. "A Comparison between Actual Distributions of Annual and Lifetime Income: Sweden 1951-89," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(4), pages 377-386, December.
    5. Blomquist, N S, 1981. "A Comparison of Distributions of Annual and Lifetime Income: Sweden around 1970," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 27(3), pages 243-264, September.
    6. Jarvis, Sarah & Jenkins, Stephen P, 1998. "How Much Income Mobility Is There in Britain?," Economic Journal, Royal Economic Society, vol. 108(447), pages 428-443, March.
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    More about this item


    Microsimulation; Fiscal Policy; Social Security; Income inequality;

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions


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