A recessionary debate: who suffered more? A study of sectoral well-being and economic insecurity in Ireland

The aim of this thesis is to identify the relationship between subjective well-being and economic insecurity for public and private sector workers in Ireland using the European Social Survey 2010-2012. Life satisfaction and job satisfaction are the indicators used to measure subjective well-being. Economic insecurity is approximated by regional unemployment rates and self-perceived job insecurity. Potential sample selection bias and endogeneity bias are accounted for. It is traditionally believed that public sector workers are relatively more protected against insecurity due to very institution of public sector employment. The institution of public sector employment is made up of stricter dismissal practices (Luechinger et al., 2010a) and less volatile employment (Freeman, 1987) where workers are subsequently less likely to be affected by business cycle downturns (Clark and Postal-Vinay, 2009). It is found in the literature that economic insecurity depresses the well-being of public sector workers to a lesser degree than private sector workers (Luechinger et al., 2010a; Artz and Kaya, 2014). These studies provide the rationale for this thesis in testing for similar relationships in an Irish context. Sample selection bias arises when a selection into a particular category is not random (Heckman, 1979). An example of this is non-random selection into public sector employment based on personal characteristics (Heckman, 1979; Luechinger et al., 2010b). If selection into public sector employment is not corrected for this can lead to biased and inconsistent estimators (Gujarati, 2009). Selection bias of public sector employment is corrected for by using a standard Two-Step Heckman Probit OLS estimation method. Following Luechinger et al. (2010b), the propensity for individuals to select into public sector employment is estimated by a binomial probit model with the inclusion of the additional regressor Irish citizenship. Job satisfaction is then estimated by Ordinary Least Squares (OLS) with the inclusion of a sample correction term similar as is done in Clark (1997). Endogeneity is where an independent variable included in the model is determined within in the context of the model (Chenhall and Moers, 2007). The econometric definition states that an endogenous independent variable is one that is correlated with the error term (Wooldridge, 2010). Endogeneity is expected to be present due to a simultaneous relationship between job insecurity and job satisfaction whereby both variables are jointly determined (Theodossiou and Vasileiou, 2007). Simultaneity, as an instigator of endogeneity, is corrected for using Instrumental Variables (IV) techniques. Limited Information Methods and Full Information Methods of estimation of simultaneous equations models are assed and compared. The general results show that job insecurity depresses the subjective well-being of all workers in both the public and private sectors in Ireland. The magnitude of this effect differs among sectoral workers. The subjective well-being of private sector workers is more adversely affected by job insecurity than the subjective well-being of public sector workers. This is observed in basic ordered probit estimations of both a life satisfaction equation and a job satisfaction equation. The marginal effects from the ordered probit estimation of a basic job satisfaction equation show that as job insecurity increases the probability of reporting a 9 on a 10-point job satisfaction scale significantly decreases by 3.4% for the whole sample of workers, 2.8% for public sector workers and 4.0% for private sector workers. Artz and Kaya (2014) explain that as a result of many austerity policies implemented to reduce government expenditure during the economic recession, workers in the public sector may for the first time face worsening perceptions of job security which can have significant implications for their well-being (Artz and Kaya, 2014). This can be observed in the marginal effects where job insecurity negatively impacts the well-being of public sector workers in Ireland. However, in accordance with Luechinger et al. (2010a) the results show that private sector workers are more adversely impacted by economic insecurity than public sector workers. This suggests that in a time of high economic volatility, the institution of public sector employment held and was able to protect workers against some of the well-being consequences of rising insecurity. In estimating the relationship between subjective well-being and economic insecurity advanced econometric issues arise. The results show that when selection bias is corrected for, any statistically significant relationship between job insecurity and job satisfaction disappears for public sector workers. Additionally, in order to correct for endogeneity bias the simultaneous equations model for job satisfaction and job insecurity is estimated by Limited Information and Full Information Methods. The results from two different estimators classified as Limited Information Methods support the general findings of this research. Moreover, the magnitude of the endogeneity-corrected estimates are twice as large as those not corrected for endogeneity bias which is similarly found in Geishecker (2010, 2012). As part of the analysis into the effect of economic insecurity on subjective well-being, the effects of other socioeconomic variables and work-related variables are examined for public and private sector workers in Ireland.

Investigation of factors driving the costs of operating the 2020 Irish power system with large-scale wind generation

The main goal of this work is to determine the true cost incurred by the Republic of Ireland and Northern Ireland in order to meet their EU renewable electricity targets. The primary all-island of Ireland policy goal is that 40% of electricity will come from renewable sources in 2020. From this it is expected that wind generation on the Irish electricity system will be in the region of 32-37% of total generation. This leads to issues resulting from wind energy being a non-synchronous, unpredictable and variable source of energy use on a scale never seen before for a single synchronous system. If changes are not made to traditional operational practices, the efficient running of the electricity system will be directly affected by these issues in the coming years. Using models of the electricity system for the all-island grid of Ireland, the effects of high wind energy penetration expected to be present in 2020 are examined. These models were developed using a unit commitment, economic dispatch tool called PLEXOS which allows for a detailed representation of the electricity system to be achieved down to individual generator level. These models replicate the true running of the electricity system through use of day-ahead scheduling and semi-relaxed use of these schedules that reflects the Transmission System Operator's of real time decision making on dispatch. In addition, it carefully considers other non-wind priority dispatch generation technologies that have an effect on the overall system. In the models developed, three main issues associated with wind energy integration were selected to be examined in detail to determine the sensitivity of assumptions presented in other studies. These three issues include wind energy's non-synchronous nature, its variability and spatial correlation, and its unpredictability. This leads to an examination of the effects in three areas: the need for system operation constraints required for system security; different onshore to offshore ratios of installed wind energy; and the degrees of accuracy in wind energy forecasting. Each of these areas directly impact the way in which the electricity system is run as they address each of the three issues associated with wind energy stated above, respectively. It is shown that assumptions in these three areas have a large effect on the results in terms of total generation costs, wind curtailment and generator technology type dispatch. In particular accounting for these issues has resulted in wind curtailment being predicted in much larger quantities than had been previously reported. This would have a large effect on wind energy companies because it is already a very low profit margin industry. Results from this work have shown that the relaxation of system operation constraints is crucial to the economic running of the electricity system with large improvements shown in the reduction of wind curtailment and system generation costs. There are clear benefits in having a proportion of the wind installed offshore in Ireland which would help to reduce variability of wind energy generation on the system and therefore reduce wind curtailment. With envisaged future improvements in day-ahead wind forecasting from 8% to 4% mean absolute error, there are potential reductions in wind curtailment system costs and open cycle gas turbine usage. This work illustrates the consequences of assumptions in the areas of system operation constraints, onshore/offshore installed wind capacities and accuracy in wind forecasting to better inform the true costs associated with running Ireland's changing electricity system as it continues to decarbonise into the near future. This work also proposes to illustrate, through the use of Ireland as a case study, the effects that will become ever more prevalent in other synchronous systems as they pursue a path of increasing renewable energy generation.