In this blog, NERI economist, Chris Smart summerises the main points of his latest NERI Report Series no. 28 on 'Migrant Workers Estimate: December 2023'.
What is the experience of non-nationals in Ireland’s labour market, what can we understand from various publicly available data sources, and what can we look to expand our understanding of or investigate further?
This short paper sets out to do just that by looking at the findings of the Labour Force Survey, as well as various departmental data sources, to understand where migrant workers are in our economy and how this is changing over time.
What we can see is that a picture of increasing diversity emerges, with a lull during the early 2010s as a result of our economic shock, followed by increased growth in the latter part of the decade and in recent years.
There are sectors which rely heavily on people from abroad to grow and succeed, particularly sectors crucial to our economic prosperity and wellbeing such as healthcare and ICT.
Another pattern is of increased diversity; whereas workers used to come from predominantly within the EU, now they are coming from further afield to take up work here.
The example of healthcare is highlighted again in the paper, where both the LFS and data on employment permits from the Department of Enterprise, Trade, and Employment (D/ETE) show growing demand for workers from outside the EU to meet our need for increased healthcare provision and to care for our sick and elderly.
The D/ETE data mentioned above also shows that, up to the end of November 2023, demand for workers across most sectors remained strong, with the exception of ICT which is experiencing global headwinds. Most sectors remain significantly above their pre-COVID trend and point to particular skills and labour shortages across the economy.
There are some areas where the findings indicate scope for further analysis. As we are all aware, labour shortages in healthcare have led to an inflow of foreign workers, helping us to meet the demands for a growing, aging population. Another area where significant labour shortages are flagged is the construction sector, and anyone who’s tried to have work done on their house or secure rental accommodation would be sure to agree. Significant government resources are being poured into supporting and expanding output in the sector across various schemes.
However, this is not leading to anywhere near the level of demand for foreign labour that is occurring in other sectors, as can be evidenced in the low issuance of employment permits in this sector. There could be several reasons for this: income limits in visa regulations could be a barrier to hiring; the prevalence of smaller firms could mean they have less capacity to deal with the application process; or simply that real wages in Ireland are not competitive when compared to other places the available labour could go. However, in the context of significant need for increased construction output, the querying of this disparity should be made a priority.
Another area where further research would be welcome is more detailed subsectoral or occupational analysis of where migrant workers end up and how this affects their labour market outcomes. While we see that migrant workers are making up an ever-growing share of the healthcare sector, for example, it isn’t clear if these workers are working for public bodies such as the HSE, or private companies with perhaps poorer remuneration or working conditions, whether they are concentrated in lower-skill occupations that are subject to more intensive work patterns, and so on. Recent work by NERI using the UCD Working in Ireland Survey (WIIS) attempts to shine a light on some of the indicators of what constitutes good work, and an ESRI paper from earlier this year highlighted the determinants of the “migrant wage gap”. Further research into areas such as these plays a vital role in understanding and improving the labour market experience of people who come to this country.
It's also important to highlight the fantastic work of the European Migration Network Ireland, who recently released their Annual Report on Migration and Asylum 2022, which uses some similar data sources to this report and provides valuable insight.
Another valuable resource is the SOLAS National Skills Bulletin 2023, which in Section 8 provides significantly more granularity on the characteristics of those who are issued employment permits, such as their qualifications, sector of work, occupation, and so on.
Understanding experience of migrant workers in Ireland and the value they bring to critical economic sectors for our society, whether that be caring for our sick and elderly, or cementing Ireland’s position as a global leader in ICT, and everything in-between, is a key exercise in ensuring Ireland’s continued development into an open, diverse, welcoming, and modern society.