Question 1:
Replacement rates provide information relating to the financial incentive to work. The replacement rate is the ratio between net income out of work and net income when in work.
Briefly analyse how replacement rates in Ireland compare to other OECD countries? You can get data from
https://www.oecd.org/els/benefitsandwagesstatistics.htm
Discuss the implications of high replacement rates for the unemployment rate.
Your answer to question 1 should not exceed 2 typed pages (Times New Roman, size 12, double spaced). The 2 page limit is inclusive of any references, tables and graphs.
Question 2:
Suppose legislation is passed which places a legal requirement on employers to provide free dental care to all employees. This raises the cost of an employee by €2 per hour.
a. What effect does this new law have on the demand for labour? Explain using a graph.
b. If employees place a value on the free dental care that is exactly equal to its cost, what effect does the new law have on the supply of labour? Explain using a graph.
c. Suppose that workers do not value the dental care at all. How does this affect the supply of labour? How does it affect the number of people unemployed? Explain using a graph.