WHAT HAS HAPPENED TO REPLACEMENT RATES

This paper compares different approaches to measuring changes in repla cement rates in Ireland over time. Results based on microsimulation mo delling suggest that the average replacement rate facing unemployed pe rsons was roughly constant between 1987 and 1994, with a small rise fo r those on Unemployment Assistance offset by a decline for those on Un employment Benefit. The mean predicted wage facing the unemployed is a bout two-thirds of the average industrial wage. Time-series constructe d using average expenditure per unemployment compensation recipient an d average earnings do not accurately reflect changes in mean replaceme nt rates. In addition to providing a better measure of the overall tre nd in replacement rates, microsimulation modelling provides a picture of their distribution, showing that the incidence of cash replacement rates over 80 per cent fell between 1987 and 1994 but the numbers faci ng rates between 70 and 80 per cent rose.