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Utilizing Microsimulation to Estimate the Private and Fiscal Returns to Education: I reland 1987–2011
Author(s) -
Flannery Darragh,
O'Donoghue Cathal
Publication year - 2016
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/manc.12088
Subject(s) - microsimulation , economics , rate of return , econometrics , irish , tax credit , fiscal system , public economics , finance , economy , engineering , linguistics , philosophy , transport engineering
This study estimates both the fiscal and net private return to education using microsimulation models. This is carried out empirically using I rish data across the period 1987–2011. The results indicate that a more generous tax/benefit system, combined with a greater state burden of education costs initially helped increase the individual's return to education, while reducing the state return from investing in education. However, this trend is reversed by 2011 as significant changes to the Irish tax/benefit system were introduced. The methodology utilized allows us to analyse the specific impact of various components of the tax/benefit system upon these returns.