The Interface between Research and Policy in Ireland: The Case of Poverty

1. The Interface between Research and Policy in Ireland:The Case of Poverty Dr Jonathan Healy Policy and Research Analyst Combat Poverty Agency 3/10/05

2. Some Definitions • Policy: a programme of actions adopted by an individual, group, or government, or the set of principles on which they are based • Research: methodical investigation into a subject in order to discover facts, to establish or revise a theory, or to develop a plan of action based on the facts discovered

3. Outline • Link between research and policy • Case study 1: child poverty • Case study 2: fuel poverty • Case study 3: social expenditure • Effectiveness of policy on poverty reduction • Suggestions for policy-oriented research

4. Research and Policy Interface • Research can inform policy either: • directly (policy submissions and statements, requests by Ministers, etc.) • indirectly (evidence-based policy-oriented research in academic, C&V and State sectors, and NGOs lobbying)

5. Combat Poverty Agency • Stage Agency established in 1986 by Statute • Autonomous but DSFA-funded • Advise on ways to reduce poverty in Ireland • Remit to foster policy-focused research on poverty in Ireland • Aim: better public understanding of poverty and appropriate policy responses

6. How Does CPA Link Research and Policy? • Funds and commissions policy-oriented research on all aspects of economic and social policy as it pertains to poverty • Undertakes in-house policy research and publishes findings as Policy Statements • Makes planned and ad hoc Policy Submissions on various poverty-related topics • Liaises with policymakers and influencers and promotes CPA research and policy messages

7. Combat Poverty Policy Submissions • Submission to the Pensions Board on the Pensions Review • Submission to the Department of Enterprise, Trade and Employment on Repealing the Groceries Order • Submission to the Department of Finance on Tax Reliefs and Exemptions for High Earners • Submission to Department of the Environment, Heritage and Local Government on the Government's Homeless Strategy • Submission on the Health Bill 2004 • Submission on Budget 2005 • Submission to the Consumer Strategy Group • Submission to the National Task Force on Obesity • Submission to the OECD on its review of higher education in Ireland

8. Case Study 1: Child Poverty • Policy Statement: Pro-active rather than reactive • Child poverty: CPA key research theme • Focus on child poverty because of Ireland’s poor performance and • Secondary analysis (in-house) of child support packages in 22 OECD countries • Examine current deficits and make recommendations

9. Child Poverty in Ireland (1973-2003)

10. Latest 2003 Data • 23.9% of households with children under 15 years have incomes below 60% of median (290,000 children ‘at risk of’ poverty) • 14.7% of households with children under 15 years are both income poor and deprived (120,000 children) • 32.6% of lone-parent households in consistent poverty

11. International Income Poverty Rates

12. Net Child Support in OECD Countries

13. Ranking of Child-Support Packages • Ireland comes 5th(€281 per month) out of all 22 countries when judged on tax concessions and income supports alone. • Ireland comes 11th (€173 per month) out of all 22 countries when judged on all child supports.

14. Replacement Rates

15. Marginal Tax Rates

16. Conclusions • Ireland has ostensibly generous child income support • Ireland invests relatively little in subsidised services for families with children • Ireland has highest typical childcare costs in EU (€570 per month) • Though not in the worst category, Ireland’s comparative ranking on child support plummets after social services are factored in • Ireland exhibits high replacement rates and high marginal tax rates for lone parents => poverty trap

17. Policy Recommendations • Income support: Reform 2nd Tier with employment-neutral Child Benefit Supplement • Childcare: Consider subsidisation of childcare (using tapered mechanism) targeting low-income and vulnerable groups using FIS disregard • Health: Move towards universal healthcare system • Policy mix requires re-emphasis of child support package with new focus on quality service provision – subsidised childcare and improved subvention of healthcare, education and housing

18. Case Study 2: Fuel Poverty • CPA/TCD-funded research under PRI • Strong policy context: • Rising and unstable energy prices • Increasing spend on fuel allowance • Ownership levels of domestic energy-efficiency measures relatively low • Environmental context • Public health context (excess winter deaths/morbidity) • Research based on earlier empirical and methodological work undertaken for PhD

19. Persistent Fuel Poverty in Europe (2001)

20. Fuel Poverty Risk Groups (2001)

21. Why Are Energy-Efficiency Standards Low?

22. Policy Recommendations 1.Implement national low-income energy-efficiency programme • Prioritise double glazing, floor and cavity-wall insulation measures • Target 24,000 homes p.a. for 10 years @ cost of €45m p.a. • Private and social housing sectors included 2. Raise revenue through carbon/energy tax • ‘Revenue recycling’ to safeguard low-income households from inflationary price effects of carbon tax • Tapered (means-tested) partial and full-cost grants to low-income owner-occupier households (avoids ‘free-riders’)

23. Policy Recommendations (cont.) 3. Regulate to improve thermal standards in private rental sector which has highest poverty risk 4. Social housing remedial works programmes to continue with additional funds as necessary 5. Minimise transactions’ costs for high-income owner-occupiers 6. Avoid tax credits: risky, inefficient, regressive 7. Strong State-led information campaign (SEI)

24. Policy Recommendations (cont.) 8. Retain current fuel allowance - Reduces severity of experience - Index-link to fuel prices - Increase further to compensate poor households if carbon tax introduced 9. ‘Action research’ to demonstrate actual (ex post) benefits of retrofit (inter-institutional) 10. Leadership of programme through ‘champion’ of energy efficiency and fuel poverty with State support (SEI)

25. Case Study 3: Social Expenditure • Commissioned policy research • Context of low social spending in Ireland • Study questions rationale for this level, using comparative data • Examines relationship between wealth, inequality and social spending • Allocation of social spending across different policy areas • Reforming social exp to achieve better outcomes

26. Findings • Irish social exp remains low relative to EU-15 • Strong negative correlation between social expenditure and income inequality • Deficits most acute in public services • Despite high correlation, hard to prove causality between social exp and +ve social outcomes

27. Irish Social Expenditure Relative to OECD Average

28. Policy Recommendations • Review and close tax reliefs as appropriate to improve tax base • Integrate excluded groups into the labour force • Improve mechanisms to increase incomes of low-income working families and for linking welfare incomes to earned incomes

29. Poverty Reduction Effect (%)

30. Why is PRE effect So Low? • Social transfers are not working as effectively at reducing poverty in Ireland • Levels of social expenditure are comparatively low • Social transfers remain heavily means-tested rather than universal

31. Policy Failure? • Data dearth? • Lack of evidence-based policy research? • Lack of exchequer funds? • Political stasis? • Overly centralised decision-making process? • Developmental Welfare State?

32. Suggestions for Policy-Oriented Research • Social science research should contain policy analysis • Policy recommendations should be: • Focused • Time-specific • Costed (if possible) • Realistic • Research should be timely, contribute to debate on topical issue