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Emigration has taken its toll

Posted on July 03, 2015 by Tom Healy

Tom Healy, Director NERI
Tom Healy, Director NERI

Significant progress has been made in reducing the overall rate of unemployment in the Republic of Ireland since 2012 when it peaked at one in seven in  the workforce. Still, the overall rate remains close to one in ten and is double that in the case of persons under the age of 26. As in previous Irish recessions, outward migration has acted as a very significant ‘safety valve’ in facilitating the movement of a large number of young persons to other countries to take up work there.  Just how many have left and what impact would their staying have had on unemployment, government finances and living standards here?  There has been a striking absence of public debate or research on these important questions. Still more noticeable has been the absence of debate about the decision to reduce the rate of job seeker allowance to new entrants to the Live Register under the age of 26. Against a context of pre-election budgetary and labour market ‘pay back’ it seems that young people join lone parents, migrants, homeless and other groups as the voiceless when it comes to determining public policy priorities.

First, it is useful to review some facts (all available from the CSO online database):

  • In 2008 out of a total population of just above 4.5 million, 670,000 persons between the ages of 15 and 24 were resident in the State.
  • Nearly half a million people (all ages) left Ireland over the period April 2008 – April 2014 (480,000 is the estimated figure from the CSO).
  • An estimated total of 338,000 came to Ireland as immigrants over the same six-year period (whether as returned Irish emigrants or as new non-Irish immigrants).
  • Putting the above two numbers together we get an estimate of 141,000 net migrants who left the State. This means that the population of the State was approximately 140,000 lower in 2014 than would otherwise have been the case in the absence of migration (of course a few of these may have died and not a few would have given birth to new residents).

Chart 1  Gross flows of emigrants and immigrants (thousands), 1987-2014

 

  • Focussing on Irish nationals only, an estimated 228,000 emigrated over the six year period while 108,000 immigrated leaving a net departure figure of 120,000. 
  • Of the 120,000 ‘net migrants’ an estimated 81,000 were in the 15-24 age group (the CSO does not provide more refined age breakdowns for migrants). The estimate is 90,000 if we exclude a net migrant inflow in 2008 and 2009 among this age-group.
  • While we cannot – from available published CSO data – break down the above number for 15-24 year olds by nationality we can safely assume that the bulk of net migration in this age-group was among Irish nationals – possibly in the region of 70,000 persons – roughly equivalent to a single year of age.
  • In summary the number of young people leaving school or college who departed from the State during the six worse year of recession and not to return came to 70,000 going by these CSO estimates. Unfortunately, it is no longer possible to estimate migration flows among school leavers as the last school leaver survey was published in 2008. However, analysis by the Department of Education and Skills indicates that emigration within a year of leaving school was much less than 4% for those completing in 2010.
  • The First Destinations Survey of the Higher Education Authority indicates that approximately 10% of university graduates were in employment ‘overseas’ within a year of graduating in 2012. This corresponding figure was 5% in 2008. The highest emigration rate was among engineering Level 8 graduates at 17%. However, these estimates would be higher if emigration were measured up to 5 years after graduating

Another – but crude – way of estimating net migration among young people is to track the number of persons by single year of age. So, by working from CSO estimates (PEA11) of persons aged 18 years of age in 2008, it is possible to estimate the numbers who emigrated year by year by comparing single-year of age estimates and after netting out for a small annual number of deaths. On this basis it would appear that out of 60,000 persons resident here and aged 18 in 2008 approximately 9,000 (or 15%) emigrated and had not returned by 2014 (the actual number is higher but we have to net off immigration). The corresponding (very crude) estimate for 19 year olds in 2008 comes in at around 6,000 or 10% of the total in 2008. A similar calculation for 18 year olds in 2011 and 2012 (when unemployment was the highest) indicates higher annual net migration rates of around 3,500 per single year of age. It is likely that the overall net migration rate for school leavers/college leavers during the worst years of the recession was somewhere in the region of 10-15% with the highest rates showing in 2012-2013.  These estimates are broadly consistent with the net migration figure of 81,000 referred to above for the age-group 15-24 as a whole. In addition to this there is likely to have been a significant number of emigrants among the 25-29 age group who have been impacted by poor job opportunities and prospects. In many cases, graduates who obtained short-term positions in the health or education services may have decided to emigrate for reasons to do with security and opportunity in positions in the UK or further afield. Unfortunately, it is not possible to estimate the number of such emigrants as the CSO present an aggregate figure for the 25-34 age group, only.

Unemployment would have been very significantly higher in the absence of outward migration

So, what impact did youth emigration have on unemployment here?  The fact that over 80,000 young people left Ireland not to return during the whole period since 2008 provides a broad indication of the overall level of unemployment or under-employment. While not all of these persons would have been unemployed or under-employed it is reasonable to assume that had they stayed in the country unemployment would have been significantly higher than it would otherwise have been either because those staying are unemployed or because other jobs would have been displaced. Indeed, it is noticeable that the pick-up in employment levels since 2012 has been marked among older workers (over 35 years of age) with little or no overall improvement in the absolute levels of employment for younger persons.  Of course, with a higher resident population there would have been some modest impact effect arising from higher spending and domestic demand – other things equal.  It is likely that the overall rate of unemployment would have been higher by at least 3 percentage points and probably 4 percentage points when total net migration is factored in at over 140,000 persons (in other words, unemployment might have peaked at 18-19% in 2012 and it might be around 13% now). These estimates are speculative but not implausible in a counter-factual scenario.

To set this in historical context, total net migration per 1,000 of population was highest in 1958 at 20.3; in 1989 it was 12.5; and in 2012 (the most recent peak) it was 7.5.  The pattern seems to follow a 20 to 30 year cycle but the peaks become lower relative to population! A particular feature of the latest migration surge is the continuation of large gross inflows alongside large gross outflows. In the year ending 2013, for example, an exodus of 89,000 persons through emigration was offset by an inward flow of 56,000 immigrants. In 1989, there were an estimated 71,000 and 27,000 emigrants and immigrants, respectively. Clearly, there a much larger degree of cross-border movement of labour with shifts in patterns of employment and skill match in areas such as hospitality, construction (which drove the initial surge in emigration in 2010), retail, IT, health etc. In other words, labour markets are becoming more global and people (especially those without families) in search of work are more likely to travel when opportunities arise.

Using the latest CSO estimates there appears to be a downward trend in net migration opening the possibility of net inward migration in the coming years depending on developments in the labour market in Ireland and abroad. Hopefully, it will be possible for some of those who emigrated including young people in particular to return to a growing labour market where quality employment is available. The permanent net loss of 140,000 through emigration of whom the majority were in their early 20s would represent a major loss of ‘human capital’ as well as a loss of the returns to investment in initial education. An ageing workforce and lack of opportunity for young entrants is not got for innovation in the longer-term (although older workers can also provide an important contribution to innovation and raising of skill levels and productivity).

Recent cuts to jobseekers allowances for young people..

The interaction between employment, social protection for those unemployed or on low wages and lifelong learning is an important area of public policy. Recent initiatives to lower the rate of payment to young first time entrants to the Live Register to €100 per week for those aged 18-21 raises many problems. In a  NERI Research InBrief by one of my colleagues (Examining the Need to Reduce Job Seekers Allowance for Young People) a lack of evidence was found for the ‘activation’ impact of very significant cuts in payments over a number of budgets up to and including the Autumn 2013 budget. ‘The absence of jobs, not motivation, is the central issue for young people seeking work’ as the InBrief states. Young unemployed constitute a vulnerable group with just over one half of the total on the live register (and under the age of 26) in receipt of €100 per week – clearly not a living income for an independent living adult.

 

Chart 2  Trends in net migration (thousands), 1987-2014

 

 

 

 

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