A comparison of incomes county by county

With the recent publication by the Central Statistics Office of Household Incomes - Regions And Counties, we have been furnished for the first time in over a quarter of a century with information about how our different counties have been performing in economic terms.

Linking this new material with earlier county income reports by the Economic and Social Research Institute it is possible to look back over 40 years to assess the rate at which incomes in different parts of the country have been increasing - to see which of them have been catching up and which have been falling behind.

Over the period from 1960 to 1998 the purchasing power of our pre-tax incomes has quadrupled. But because personal taxes now absorb a larger share of our incomes than 40 years ago, the purchasing power of our average after-tax income today - the best measure of our living standards - has risen somewhat less rapidly: approximately 3-1/3 times.

Nevertheless that is a huge increase in our living standards within not much more than a half a lifetime.

Not every part of the country has benefited equally: some have fallen behind, but others have moved further and faster. It is good to be able to record that in what has always been the poorest part of the Republic, the north-west, the purchasing power of per capita pre-tax incomes has risen a good deal faster than elsewhere: generally by about 4-1/2 times.

This is true of Donegal, Monaghan, Sligo, Leitrim, Mayo, Roscommon and Longford - and also of Galway, which because of its rapid growth has become the fifth-richest county in Ireland. By 1998 Leitrim, where 30 years earlier average incomes were one-third below the national average, was falling short of the national level by only one-sixth.

Thus it can be said that at least since 1969, an important element of our regional policy has had a considerable measure of success in the part of the State most in need of a boost.

By contrast, in certain other counties, the purchasing power of pre-tax per capita incomes has risen since 1960 only 31/2 times. This is true of Cavan, Offaly, Carlow, Tipperary - all counties which in 1960 also had incomes below the national average, albeit somewhat higher than in the north-west.

It should, however, be added that pretax incomes in the richest part of the State - Co Dublin - have also risen more slowly: by a similar factor of 31/2 times during this period of almost 40 years. At the same time, by 1998 slower-performing Co Dublin was also contributing threequarters of the £700 million transfers from the Dublin region to the poorer parts of the State.

The region as a whole, which includes Dublin's three neighbouring counties, Kildare, Meath and Wicklow, provided well over 90 per cent of 1998 transfers through the tax and social welfare system to other parts. As a result of this process average per capita incomes in counties such as Leitrim and Longford were boosted by about £800, or almost £2,500 in each household - an "add-on" of over 10 per cent to the incomes generated locally.

The low income counties of the northwest, which have grown faster than the rest of the State, have benefited from more than half of the net transfers of resources from the Dublin region. These transfers are an outcome of the fact that these counties pay less tax, by virtue of the fact that only two-fifths of incomes there derive from PAYE earnings and also because of the lower average levels of incomes generated there - while at the same time they also secure a disproportionate share of transfer payments through the social welfare system.

Although the region which has benefited most from these transfers was the north-west, the south-east corner was also a significant beneficiary. This is because, to an extent not generally appreciated, Wexford and Carlow remain relatively poor counties, with incomes over 20 per cent below the national average - which is also true of Kerry.

In 1998, the effect of the transfers from the area around Dublin to poorer parts of the State was to reduce by one-third the gap between the richest and poorest counties. Thus, whereas before these transfers average incomes in Wexford were almost £4,400 lower than in Dublin, the shortfall after net transfers was reduced to less than £2,900.

If we look at the period since we joined the EU in 1973, we find that in the quarter century to 1998 the purchasing power of household incomes more than doubled. However, during this more recent quarter of a century in three parts of the State, incomes fell behind the rest, failing to double over this period.

These areas were the whole of the south-east, including neighbouring Tipperary; as well as Cavan and Kerry.

THE SLOW growth of the southeast in conditions of EU membership has been particularly surprising. Because of the proximity of this area to continental Europe and the possibility that much of the new trade with that market would be channelled through Rosslare or Waterford, three decades ago it seemed that this corner of Ireland would be particularly favoured.

Instead, a region which before we joined the Community was at least keeping up with the rest of the State has since fallen well behind. Whereas the purchasing power of incomes elsewhere in the State as a whole grew by almost 110 per cent between 1973 and 1998, in Wexford, Kilkenny and Waterford it fell short of this growth by almost one-fifth.

The performance of Kerry has also been disappointing. Despite substantial net transfers, which in 1998 were running at over £550 per capita, economic growth has been much slower there than in neighbouring counties - slower indeed since 1991 than in any part outside the southeast.

Cavan has also had a slow growth rate since 1973, as a result of which in the following quarter century its average income level dropped from ninth in the State to 19th. These are the three areas that now need particular attention from our policy-makers.

The counties which contain our provincial cities generally have had good income growth rates - significantly better than that of Dublin, once again demonstrating that aspects of our regional policy have been working well. This has been most striking in the case of Galway, which since 1991 has moved from 10th to fifth place in terms of average income levels, as well as Limerick, together with neighbouring Clare.

While the income growth of Co Dublin has been slow, that of Kildare, influenced by the arrival of Intel, has been striking. In the three counties contiguous to Dublin, the population has been rising rapidly. Between 1991 and 1998 it jumped by more than one-sixth in the case of Kildare - which means that purchasing power in that county actually doubled during this brief seven-year period.

These new tables of county incomes, especially when linked to the earlier Economic and Social Research Institute County Income studies, contain much of interest to people in every part of our State and provide much food for thought for our policy-makers.

gfitzgerald@irish-times.ie