[go: up one dir, main page]

IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp7481.html
   My bibliography  Save this paper

Crisis, Response and Distributional Impact: The Case of Ireland

Author

Listed:
  • Callan, Tim

    (ESRI, Dublin)

  • Nolan, Brian

    (University College Dublin)

  • Keane, Claire

    (ESRI, Dublin)

  • Savage, Michael

    (University College Dublin)

  • Walsh, John R.

    (ESRI, Dublin)

Abstract
Ireland is one of the countries most severely affected by the Great Recession. National income fell by more than 10 per cent between 2007 and 2012, as a result of the bursting of a remarkable property bubble, an exceptionally severe banking crisis, and deep fiscal adjustment. This paper examines the income distribution consequences of the recession, and identifies the impact of a broad range of austerity policies on the income distribution. The overall fall in income was just under 8 per cent between 2008 and 2011, but the greatest losses were strongly concentrated on the bottom and top deciles. Tax, welfare and public sector pay changes over the 2008 to 2012 period gave rise to lower than average losses for the bottom decile. Thus, the larger than average losses observed overall are not due to these policy changes; instead, the main driving factors are the direct effects of the recession itself. Policy changes do contribute to the larger than average losses at high income levels.

Suggested Citation

  • Callan, Tim & Nolan, Brian & Keane, Claire & Savage, Michael & Walsh, John R., 2013. "Crisis, Response and Distributional Impact: The Case of Ireland," IZA Discussion Papers 7481, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp7481
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp7481.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Paul, Satya, 2004. "Income sources effects on inequality," Journal of Development Economics, Elsevier, vol. 73(1), pages 435-451, February.
    2. Olivier Bargain & Tim Callan, 2010. "Analysing the effects of tax-benefit reforms on income distribution: a decomposition approach," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(1), pages 1-21, March.
    3. Callan, Tim, 2012. "Budget Perspectives 2013," Research Series, Economic and Social Research Institute (ESRI), number RS28.
    4. Donald O’Neil & Olive Sweetman, 2001. "Inequality in Ireland 1987-1994: A Comparison Using Measures of Income and Consumption," Journal of Income Distribution, Ad libros publications inc., vol. 10(3-4), pages 2-2, September.
    5. Jeff Larrimore & Richard V. Burkhauser & Philip Armour, 2013. "Accounting for Income Changes over the Great Recession (2007-2010) Relative to Previous Recessions: The Importance of Taxes and Transfers," NBER Working Papers 19699, National Bureau of Economic Research, Inc.
    6. Callan, Tim & Keane, Claire & Savage, Michael & Walsh, John R., 2013. "Distributional Impact of Tax, Welfare and Public Service Pay Policies: Budget 2014 and Budgets 2009-2014," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).
    7. Olivier Bargain & Tim Callan & Karina Doorley & Claire Keane, 2017. "Changes in Income Distributions and the Role of Tax‐Benefit Policy During the Great Recession: An International Perspective," Fiscal Studies, Institute for Fiscal Studies, vol. 38, pages 559-585, December.
    8. Znuderl, Nusa & Kearney, Ide, 2013. "User Cost of Debt-Financed Capital in Irish Manufacturing Industry: 1985 ? 2011," Papers WP448, Economic and Social Research Institute (ESRI).
    9. Shorrocks, Anthony F, 1984. "Inequality Decomposition by Population Subgroups," Econometrica, Econometric Society, vol. 52(6), pages 1369-1385, November.
    10. Keane, Claire & Callan, Tim & Savage, Michael & Walsh, John R. & Colgan, Brian, 2014. "Distributional Impact of Tax, Welfare and Public Service Pay Policies: Budget 2015 and Budgets 2009-2015," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).
    11. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
    12. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    13. Callan, Tim & Keane, Claire & Savage, Michael & Walsh, John R. & Timoney, Kevin, 2012. "Work Incentives: New Evidence for Ireland," Papers BP2013/3, Economic and Social Research Institute (ESRI).
    14. Brian Nolan & Bertrand Maitre & Sarah Voitchovsky & Christopher Whelan, 2012. "GINI DP 70: Inequality and Poverty in Boom and Bust: Ireland as a Case Study," GINI Discussion Papers 70, AIAS, Amsterdam Institute for Advanced Labour Studies.
    15. Clemens Fuest & Judith Niehues & Andreas Peichl, 2010. "The Redistributive Effects of Tax Benefit Systems in the Enlarged EU," Public Finance Review, , vol. 38(4), pages 473-500, July.
    16. repec:esr:chaptr:jacb201240 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cathal O’Donoghue & Jason Loughrey & Denisa M. Sologon, 2018. "Decomposing the Drivers of Changes in Inequality During the Great Recession in Ireland using the Fields Approach," The Economic and Social Review, Economic and Social Studies, vol. 49(2), pages 173-200.
    2. Thor O. Thoresen & Zhiyang Jia & Peter J. Lambert, 2013. "Distributional benchmarking in tax policy evaluations," Discussion Papers 765, Statistics Norway, Research Department.
    3. Neves Costa, Rita & Pérez-Duarte, Sébastien, 2019. "Not all inequality measures were created equal - The measurement of wealth inequality, its decompositions, and an application to European household wealth," Statistics Paper Series 31, European Central Bank.
    4. Thor O. Thoresen & Zhiyang Jia & Peter J. Lambert, 2016. "Is there More Redistribution Now? A Review of Methods for Evaluating Tax Redistributional Effects," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 72(3), pages 302-333, September.
    5. I. Josa & A. Aguado, 2020. "Measuring Unidimensional Inequality: Practical Framework for the Choice of an Appropriate Measure," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(2), pages 541-570, June.
    6. Teixidó Figueras, Jordi & Duro Moreno, Juan Antonio, 2012. "Ecological Footprint Inequality: A methodological review and some results," Working Papers 2072/203168, Universitat Rovira i Virgili, Department of Economics.
    7. Verbist, Gerlinde & Vandelannoote, Dieter & Decoster, André & Perelman, Sergio & Vanheukelom, Toon, 2015. "A bird’s eye view on 20 years of tax-benefit reforms in Belgium," EUROMOD Working Papers EM10/15, EUROMOD at the Institute for Social and Economic Research.
    8. SOLOGON Denisa & ALMEIDA Vanda & VAN KERM Philippe, 2019. "Accounting for the distributional effects of the 2007-2008 crisis and the Economic Adjustment Program in Portugal," LISER Working Paper Series 2019-05, Luxembourg Institute of Socio-Economic Research (LISER).
    9. Orsetta Causa & Mikkel Hermansen, 2017. "Income redistribution through taxes and transfers across OECD countries," OECD Economics Department Working Papers 1453, OECD Publishing.
    10. Billette de Villemeur, Etienne & Leroux, Justin, 2022. "Capturing Income Distributions and Inequality Indices Using NETs (Negative Extremal Transfers)," MPRA Paper 112660, University Library of Munich, Germany.
    11. Nerijus Černiauskas & Denisa M. Sologon & Cathal O’Donoghue & Linas Tarasonis, 2022. "Income Inequality and Redistribution in Lithuania: The Role of Policy, Labor Market, Income, and Demographics," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(S1), pages 131-166, April.
    12. Chantreuil, Frédéric & Fourrey, Kévin & Lebon, Isabelle & Rebière, Thérèse, 2021. "Magnitude and evolution of gender and race contributions to earnings inequality across US regions," Research in Economics, Elsevier, vol. 75(1), pages 45-59.
    13. Ivica Urban, 2014. "Contributions of taxes and benefits to vertical and horizontal effects," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(3), pages 619-645, March.
    14. Frank Cowell & Carlo Fiorio, 2011. "Inequality decompositions—a reconciliation," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(4), pages 509-528, December.
    15. Wang, Chen & Caminada, Koen, 2011. "Disentangling income inequality and the redistributive effect of social transfers and taxes in 36 LIS countries," MPRA Paper 32821, University Library of Munich, Germany.
    16. Jurkatis, Simon & Strehl, Wolfgang, 2014. "Gini decompositions and Gini elasticities: On measuring the importance of income sources and population subgroups for income inequality," Discussion Papers 2014/22, Free University Berlin, School of Business & Economics.
    17. Alari Paulus & Iva Valentinova Tasseva, 2020. "Europe Through the Crisis: Discretionary Policy Changes and Automatic Stabilizers," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(4), pages 864-888, August.
    18. Nerijus Cerniauskas & Denisa M. Sologon & Cathal O’Donoghue & Linas Tarasonis, 2020. "Changes in income inequality in Lithuania: the role of policy, labour market structure, returns and demographics," Bank of Lithuania Working Paper Series 71, Bank of Lithuania.
    19. Orsetta Causa & Mikkel Hermansen, 2018. "Income Redistribution Through Taxes and Transfers across OECD Countries," LIS Working papers 729, LIS Cross-National Data Center in Luxembourg.
    20. Frank Cowell & Carlo V. Fiorio, 2010. "GINI DP 4: Inequality Decompositions," GINI Discussion Papers 4, AIAS, Amsterdam Institute for Advanced Labour Studies.

    More about this item

    Keywords

    tax; income distribution; recession; welfare;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp7481. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.