Ireland tops European league of jobless households
The proportion of households without a working adult in Ireland is the highest out of 31 European countries and more than double that of the euro zone average, according to a report published by the Economic and Social Research Institute (ESRI) this morning.
In 2007, before the recession began, Ireland also had the highest proportion of jobless households in the zone.
In 2010, 22 per cent of households in Ireland were jobless compared to the euro zone average of just over 10 per cent. A jobless household is defined as one in which its adult(s) spend less than one-fifth of their available time in employment.
In Spain and Greece, where the rate of unemployment among those in the labour force in 2010 was considerably higher than in Ireland, the percentage of households without a working adult stood at 10 per cent and 7.5 per cent respectively. The report notes that Ireland had an unusually high percentage of jobless households when the economy and employment levels were growing strongly.
Joblessness in boom
“Even during the boom years of the early 2000s, the rate of joblessness at household level was very high by European standards,” it states.
Ireland had the highest rate of jobless households in the zone in 2007, according to the Eurostat data the report uses. Among all 27 members of the EU, only Bulgaria had a higher rate in that year.
Between 2004 and 2007, a period of very low unemployment and rapid jobs growth, the share of the State’s households defined as jobless recorded a double-digit increase to reach 15 per cent of the total. The average across the euro zone in 2007 was just below 10 per cent.
During the 2004-07 period Ireland was one of the few countries in the EU to experience an increase in the proportion of jobless households. This occurred despite Ireland recording the highest rate of employment growth in the EU over the previous decade.
“Welfare reforms to encourage work were introduced in a number of European countries, such as the United Kingdom, Norway, Denmark and the Netherlands in the 1990s and Germany in the 2000s,” the report notes.
According to Dr Dorothy Watson, one of its authors, such reforms were not given the same emphasis in Ireland.
Complex welfare system
The Irish welfare system is defined by “its complexity, with a diverse range of different benefits available to working-age adults. While the payment rates are quite similar, each scheme has its own set of rules regarding the assessment of means, tapering arrangements and earnings disregards,” the report says.
However, it notes the effectiveness of the social welfare system in reducing poverty. “In 2004, 70 per cent of those in jobless households were at-risk-of-poverty. This had fallen to 34 per cent by 2010. This change over time appears to be entirely due to an increase in the generosity of social welfare payments relative to the poverty income threshold.”
One in 25 people in the State was classified as “working poor” in 2010, unchanged on 2007 and 2004. The definition of poor in this context includes those whose household incomes are lower that 60 per cent of the median.
The report concludes the working poor “are not a particularly disadvantaged group because many are self employed or have a third-level qualification”. The largest share of the working poor, at 44 per cent of the total, was self-employed.
Work and Poverty in Ireland: An Analysis of CSO Survey on Income and Living Conditions 2004-2010 will be presented at an ESRI conference this morning. Its other co-authors are Bertrand Maître of the ESRI and Christopher Whelan of UCD.