Identifying policy impacts in the crisis: Microsimulation evidence on tax and welfare

Abstract

Ireland?s banking, property and fiscal crises, combined with a worldwide Great Recession have had severe implications for household incomes. Particular attention has focused on how incomes at various levels have been affected by tax and welfare policy responses to the overall crisis. This paper describes how SWITCH, the ESRI tax-benefit model, has been rebased to use data from SILC (Survey on Income and Living Conditions) 2010, capturing the major fall in household incomes and rise in unemployment. Selected analyses based on 2008 and 2010 data are reported, to give insights into the distributional and incentive impacts of tax and welfare policy up to 2012.