Headline poverty target reduction in Ireland and the role of work and social welfare

June 13, 2022
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Independent of the level of economic development and the economic circumstances of the time, all welfare states face challenges in preventing and tackling poverty. In response to these, many welfare states have developed and implemented anti-poverty strategies. In this regard, the Government of Ireland has a long history of anti-poverty strategies, launching its first national anti-poverty strategy in 1997. This strategy, as well as the successive ones, included headline poverty targets. The current headline poverty target aims: “… to reduce the national consistent poverty rate to 2% or less and to do so over the period up to 2025.” (Government of Ireland, 2020).

The consistent poverty measure identifies people that are at risk of poverty (AROP) (share of people with an equivalised income below 60% of the national median income) and are experiencing basic deprivation (enforced lack of at least two basic goods and services out of a list of 11).

This study sets out to assess how changes in employment and social transfers might contribute to reaching these targets. As consistent poverty combines two different metrics, we cannot simulate the direct effect of policy changes on consistent poverty; instead, we examine the two component parts. The study addresses the following research questions:

  1. How has the level of AROP and deprivation, and their overlap,changed over time and across social risk groups?
  2. How would a (universal) increase in the value of social transfers influence levels of deprivation?
  3. How would reforms to specific social transfers and packages of transfers influence levels of AROP?
  4. How would changes in the level and hours of employment among different groups influence levels of AROP?

This study draws on all the waves of the Survey of Income and Living Conditions (SILC) from 2004 to 2019 and the SWITCH microsimulation model to address these questions.