Work and Poverty in Ireland: An Analysis of CSO Survey on Income and Living Conditions 2004-2010

Abstract

a new research report on Work and Poverty in Ireland by the Economic and Social Research Institute (ESRI) is published. The report measures changes in the level of jobless households (households where adults spend less than one fifth of the available time in employment) and in-work poverty in Ireland. The focus of the report is on working-age adults and their dependent children between 2004 and 2010, a period spanning economic growth and deep recession.

The report finds that the percentage of people in jobless households increased very rapidly after the start of the recession, from 15 per cent in 2007 to 22 per cent in 2010 (latest data). The percentage in Ireland is now double the average across Europe.

The high rate in Ireland is partly due to the level of unemployment, but other important factors are that, compared to other EU countries, jobless adults in Ireland are less likely to live with a working adult and they are much more likely to live with children.

The report finds a strong link between household joblessness and poverty. It highlights the vital role played by welfare payments and other social transfers in lifting jobless households out of financial poverty. Ireland is somewhat unique in Europe in the effectiveness of social transfers in reducing income poverty. While the Irish social welfare system has become more efficient over time at lifting people in jobless households above the national financial poverty threshold, there has been essentially no improvement in their living standards (as measured by the basic deprivation indicator, 51 per cent in 2010 for those in jobless households) or levels of financial stress (58 per cent in 2010).

The risk of living in a jobless household is higher for people with low levels of education, in lone parent households and in households where an adult has a disability. Over one third of those living in jobless households were children and nearly one fifth were adults with a disability. Taken together, these two groups account for over one half of those living in jobless households.

The Irish rate of in-work poverty (people with a job but who are living in poor households) is similar to the EU average. It increased slightly after the recession (from 7 per cent in 2007 to 8 per cent in 2010).

The risk of being in-work poor is higher for the self-employed, those in a low-skilled occupation, people working part-time and those with no educational qualifications. About two in five of the in-work poor in 2010 were self-employed. Compared to adults in jobless households, the working poor do not appear to be as disadvantaged in terms of education, social class or household structure.