OECD urges better immigrant integration

Ireland’s immigration policy should concentrate on better integrating those arriving to the State, according to a survey of the Irish economy published by the OECD this morning.

Noting the soaring rates of immigration to Ireland over recent years, the report states that although immigrants tend to be young, well-educated, and in the workforce, they are often employed in basic jobs.

Immigrants tend to have a higher education level than the native Irish yet earn wages considerably below average, indicating Ireland may not be getting the most out of its immigrant workforce, the survey finds.

The OECD recommends a greater emphasis on language training for adult immigrants, pointing to language skills as a reason for the wage gap, and on-the-job skills assessment for cases where qualifications are difficult to assess, as immigrants have trouble getting their foreign qualifications recognised.

The report notes that as most migrants are young and employed, they have not put major demands on public services or the welfare system, but it warns the rapid population growth has added to infrastructure bottlenecks and driven housing demand, and that these pressures will grow if high levels of inward migration are sustained.

Lower inward migration or a net outflow cannot be ruled out, the OECD points out, and it warns that uncertainty over population growth will be a challenge for prioritising public spending and infrastructure planning.

An extension of user charges is recommended for infrastructure services, with the intention of restraining demand and achieving efficiency.

On the subject of pensions, the OECD observes challenges despite the Republic's relatively young population.

While noting large rises in the State pension have reduced poverty, the OECD states that a large retirement savings deficit remains for many households between the State pension and a reasonable replacement income in retirement.

It says private pensions saving may be too limited to close this gap for many low- and middle-income earners and contends that the large tax incentives to save for retirement are poorly targeted and have a limited effect on saving.

Some degree of compulsion to raise pension saving is suggested by the OECD through moving from “opt in” to “opt out” private pensions, and a fully compulsory scheme may be necessary if this strategy does not raise pension saving, the report says.

It also advises that the “very costly” tax incentives to encourage private pensions should be reduced and better targeted.

Responding to report, Minister for Integration Conor Lenihan said “This report outlines the scale of the challenges facing Ireland in successfully integrating migrants into Irish society.

"A detailed integration strategy will be published in the next few weeks,” the Minister added.