Increasing women’s participation in the labour force, coupled with enhanced welfare packages targeting children and their families, will be crucial to meeting poverty reduction targets, a landmark report from the Economic and Social Research Institute (ESRI) finds.
Titled Headline Poverty Target Reduction in Ireland and the Role of Work and Social Welfare, the report was commissioned by Minister of State for Social Inclusion Joe O’Brien to “elicit more specific pathways” to reduce both the at risk of poverty (AROP) and consistent poverty rates.
The Government’s Roadmap to Social Inclusion 2020-2025 sets a target of reducing the AROP rate from 14.9 per cent in 2018 to 12.8 per cent and consistent poverty from 5.6 per cent to 2 per cent or less, by 2025.
AROP, sometimes called relative poverty, applies to those living on less than 60 per cent of the median income. Consistent poverty means being both at risk of poverty and also experiencing enforced deprivation of at least two key items, such as a second pair of strong shoes, ability to keep the house warm, and, being able to have visitors for a drink or food at least once a month.
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The report, published on Monday, says: “In 2019 lone parents and their children account for 22 per cent of those AROP and working-age adults with a disability and their children for a further 17 per cent.”
It continues: “Exclusion from the labour market . . . [and] household joblessness brings a high risk of poverty . . . and is associated with a high level of dependence on social welfare transfers.”
Increasing spend on six key social welfare transfers targeting children and their families and older people, as well on five core benefits, to €100 million net each, would increase most payments by “between 3.5 per cent and 11 per cent”. However, poverty rates overall would decrease only modestly, by between 0.1 per cent and 0.8 per cent, say researchers.
Another approach – increasing key welfare packages aimed at children, older people and low-paid workers – by an overall net €1 billion would reduce poverty by 1.5 per cent and child poverty by 3.3 per cent.
“The children’s reforms have the greatest effect on poverty for the entire population, with a €1 billion spend resulting in an overall reduction in poverty of 2.3 percentage points,” the report says. But it warns this would “not result in substantial progress towards a consistent poverty rate of 2 per cent if executed alone”.
Increasing labour market participation of key groups, including a person in every “jobless household” (as long as they are fit), married women, lone parents and non-working, non-disabled people in homes with a disabled person, would reduce overall AROP rates by up to 2.9 per cent, and child poverty rates by up to 5.2 per cent.
“Of the labour market reforms considered, increasing woman labour market participation had the largest impact on AROP. The impact of increases in labour market participation of lone parents or the head of household in a household with a person with a disability have relatively modest effects on the AROP overall. This may appear surprising but reflects the small size of these groups in the overall population.
“This would require very significant investments in childcare supports, adult care supports, education, training, pre-employment and job supports for those that are currently excluded.”
It says that “broader policies to reduce costs of living will have a large impact on families with low levels of resources”.
