Measuring the Employment Effects of the Rural Renewal Tax Scheme

Abstract

This paper presents evidence on the effectiveness of the Rural Renewal Tax Scheme introduced by the Irish Government in 1998. The rationale for the scheme puts the emphasis on new economic activity and economic growth in the designated area. Thus, it is legitimate to look for positive employment impacts as a primary outcome of the tax scheme. The empirical results suggest that the tax scheme has had positive effects on the numbers of people unemployed in the tax area. However, using rough estimates of the costs of the scheme, these employment gains are not significant enough for the scheme to pass an efficiency test.