Utilizing Microsimulation to Estimate the Private and Fiscal Returns to Education: Ireland 1987-2011*

This study estimates both the fiscal and net private return to education using microsimulation models. This is carried out empirically using Irish 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.