Survey sheds light on polarisation of workforce

SINCE the late 1980s the Irish economy has been experiencing an unprecedented boom. The numbers at work rose by 18 per cent between April 1989 and April 1996, while the numbers unemployed dropped. by 6.1 per cent and the unemployment rate fell from 15.6 to 12.9 per cent of the labour force. At the same time a net emigration rate equal to 1.2 per cent of the population was replaced by a small net inflow of population. This favourable record contrasts sharply with the rest of the EU where the numbers at work fell and the unemployment rate rose.

The aggregate figures do not reveal how employment and unemployment are distributed between population groups and households. In Britain some publicity has recently been devoted to the concept of the "polarisation of work"*. By this is meant an increase in the proportion of households with no working adult at a time when the proportion of multiple-earner households is also increasing. Rising proportions of "workless" and "work rich" households imply increasing inequality. In this country there is current speculation about how the economic boom has affected the distribution of income. Some commentators assert that there has been a similar polarisation of opportunities here to that observed in Britain, but few facts have been adduced to support this claim. The published results of the Labour Force Survey can be used to shed light on these issues.

A study of the incidence of unemployment by demographic group reveals that the unemployment rate among married males - sometimes taken as most sensitive indicator of "involuntary" unemployment - fell sharply, from 15.6 to 11.1 per cent. The rate among single males fell only from 20 to 19.4 per cent, and that among women from 11.3 to 9.7 per cent. The rate of unemployment among single males is now anomalous and the reasons for this require investigation.

The LFS data on the incidence of unemployment by household type reveals a generally favourable trend between

1989 and 1996. Confining our attention to households with at least one economically active member, we see that the proportion with someone unemployed dropped from 20.6 per cent in 1989 to 17.6 in 1996. The proportion of "workless" households - with someone unemployed and no-one employed - fell from 11.9 to 9.8 per cent. On the other hand, the proportion with at least one employed person increased from 88.1 to 90.2 per cent, while the proportion of these where no-one was unemployed also increased (from 90.0 to 91.4 per cent). There has been a dramatic increase in the proportion of households that could be classified as "work-rich" (that is, with two or more employed persons and no-one unemployed) - from 30.3 to 40.2 per cent of the total - while the number of "mixed" households (with some employed and some unemployed members) fell from 8.8 to 7.8 per cent.

An unfavourable trend that is apparent from the Irish data is the increase in both the number and proportion of households where no-one is working and two or more people are unemployed. In 1996 these constituted 1.9 per cent of all active households, compared with 1.6 per cent in 1989. While this proportion is still very small, there were none the less 15,800 such households in 1996 containing probably over 50,000 people. It is in these households that a culture of welfare dependence can grow and be transmitted from one generation to the next. The increase in the numbers in this situation is worrying.

These trends in the incidence of unemployment by household type should be viewed in the context of a dramatic fall in the size of Irish households. The number of households with six or more persons decreased by almost a quarter between 1989 and 1996. This is to be expected as a reflection of the falling birth rate and shrinking family size. On the other hand, the number of two and three-person households increased by over 20 per cent. The number of family units consisting of couples without children increased from 152,000 in 1989 to 190,000 in 1996. Family units without children where the female partner is aged under 45 increased by 37 per cent, while those where the female partner was aged 45 and over increased by 19 per cent. Thus the trend for more older coupIes to live alone seems to be the main factor behind the increasing number and proportion of households in which there are no economically active persons, which now amount to one quarter of the total.

Despite the growth in households with no active members, the rapid growth of employment since 1989 may be said to have reduced the inequality in the distribution of employment opportunities between households. While there has been a very rapid growth of multiple-earner households, and a fall in the proportion of households with some people working and some unemployed, there has also been a drop in the proportion of workless household.

See article by Paul Gregg and Jonathan Wadsworth in Employment Audit, Issue One, Summer 1996.

Brendan Walsh, is a professor of economics at University College, Dublin.