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Labour Market Trends in the Republic of Ireland

Labour Market Trends in the Republic of Ireland

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Authors

Tom McDonnell and Ciarán Nugent

Summary

In this paper, we present an overview of medium-term developments in the Republic of Ireland labour market. We describe how conditions in the Irish labour market had still not fully recovered in 2017, from the impact of the 2007-08 financial crisis using Central Statistics Office (CSO) data for a selection of indicators related to employment, unemployment and wages. The data suggest there was a degree of slack in the Irish labour market in 2017. Unemployment and underemployment were still higher than a decade previously, while Irish employment and participation rates were significantly behind the best performers in Europe. In addition, real wage growth had been very weak since the onset of the economic recovery in 2012, while job vacancy rates were low by European standards. Overall, there was little evidence of the labour market overheating in 2017. The data also suggest that younger cohorts have borne a disproportionate share of the burden of labour market adjustment post 2007-08 and, as a group, have lower employment rates, higher unemployment levels, and a higher likelihood of experiencing precarious work. Finally, we show that while the gap has been gradually narrowing in employment outcomes for women and men, Ireland still lags behind its Western European counterparts in terms of labour market outcomes for women. The relatively low employment rate for women brings down the overall rate to a level where it lags significantly behind top performing countries. In this context, policies that reduce labour market barriers for women could meaningfully improve Ireland’s overall employment rate. The excessive cost of childcare compared to other European countries is one such barrier and measures to reduce childcare costs would likely increase labour force participation rates for women.

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