This paper presents an overview of developments in the labour market in the Republic of Ireland, tracking a selection of indicators related to employment, unemployment and wages.
In many respects, the labour market had still not fully recovered in 2018 from the impact of the 2007-08 financial crisis. The data suggest there was a degree of slack in the Irish labour market in 2018 with little evidence of overheating.
Unemployment and underemployment were still higher than a decade previously, while Irish employment and participation rates remained down over the same period. Irish employment and participation rates are significantly behind the best performers in Europe as is the job vacancy rate, a key indicator of labour market vibrancy. Following years of stagnant average real wage growth, 2018 saw significant gains.
However, this growth was concentrated in a handful of sectors, all of which also experienced strong employment growth: Administrative and support service activities, Transport and storage, Education and Construction.
The data show that the financial crisis disproportionately affected labour market conditions for younger cohorts. In addition, improvements in conditions for younger workers have been much slower in recovery, leading to higher intergenerational inequalities in many indicators than existed pre-crisis: younger workers have lower employment rates, higher unemployment and are more likely to be precarious workers.
Finally, the data show a narrowing gap in employment rates between women and men. This is due to both an increasing rate for women but also a lower rate for men over a decade, which has not recovered from the property crash. Ireland still lags behind in the participation rate of women, negatively affecting our overall performance relative to top performing countries. Policies that reduce labour market barriers for women, such as reducing the cost of childcare, could meaningfully improve Ireland’s overall participation and employment rates.