In the Ireland of the 1950s, scarred by emigration and unemployment, economic growth had to be a top priority. And, from the second half of that decade onwards, employment-generating growth rightly became the principal motivating force in Irish economic policy; replacing the previous quarter-century's self-defeating drive for an unrealisable self-sufficiency.
In 1967 a national target of full employment within two decades was suggested in a seminal report by the National Industrial Economic Council, the precursor of today's NESC.
At the time this objective was widely regarded as unrealistic. The committee drafting this report, of which I was a member, was faced with the fact that this would require an average growth rate of about 5.5 per cent. Now that was a good deal higher than the 4.25 per cent growth achieved during the early 1960s, and it made no allowance for possible interruptions in global growth, such as occurred due to the two oil crises of 1973-74 and 1979-80, and again at the start of the 1990s, due to the widespread economic impact of German reunification. And it made no provision for the impact of the self-destructive policies pursued by government in the late 1970s.
A third of a century later it is interesting to see that the NIEC report's target of a 3 3/4 times increase in GNP by 1990 with full employment has been achieved, 10 years later than suggested.
Our problem now seems to be that some of those driving our national train seem to want to run us into the buffers by continuing to maximise economic growth. With full employment this makes no sense, for it threatens to derail our economy by generating unsustainable inflationary pressures.
This growth maximisation objective should now be modified to a rate of growth sufficient to raise our average living standards to our neighbours' level within a reasonable period, while avoiding inflationary pressures that push up prices, including house prices in particular. A growth rate of around 5 per cent rather than 7.5 per cent is what we need to aim at.
This would provide further opportunities for married women to re-enter the labour market where they wish to do so, but would not require them to be put under pressure to do so if they preferred to work in the home.
One may argue the pros and cons of the recent Budget effort to boost the employment of married women artificially by introducing extra tax reliefs for two-income families. But this move, I believe, will have much less impact upon our labour shortage than our policy-makers may have assumed.
Why so?
First of all, we have a far bigger childcare problem than any of our EU neighbours. Despite the fall in the birth rate during the past two decades, we still have one-third more households with children than our neighbours and more children per household. In 1997 the proportion of two-parent Irish households with three or more children was almost three times as great here as in the rest of the EU.
For the next decade or so the care of children is bound to have a more inhibiting effect here on women rejoining the labour force than elsewhere in the EU. Now, leaving aside Scandinavia, which has a quite distinct demography, the proportion of 25- to 49-year-old married women in the labour force in northern European countries in 1997 averaged around 73 per cent, as against 54 per in Ireland. For single workers our ratio was similar. However, during the 1990s our ratio of married women in the labour force had been rising twice as fast.
Between 1987 and 1997 our proportion of 25- to 54-year-olds almost doubled, jumping by 20 percentage points. Nevertheless, we cannot expect to attain the same participation by married women in the labour force as other northern European countries soon. Between 1997 and 2007, with greatly improved childcare facilities, we might hope to increase the proportion of married women in the labour force, from 54 to 66 per cent.
With fewer than 400,000 married women in this 25-49 age bracket, such a development over a decade would add rather fewer than 50,000 married women to the labour force, i.e. about 5,000 a year.
Given that in the past couple of years our labour force has been growing at about 65,000 a year, and immigration at 45,000 a year, adding 5,000 more married women per year would not be very significant.
Any such addition to the labour force could be influenced by other factors. One of these is the future trend of marriages and more particularly births. Since early 1998 there has been a remarkable rise of a sixth in our marriage rate, boosting it back to the level of a decade ago. Data for the earlier 1990s suggest most will be marriages of women aged 30 or over.
Paradoxically, during this marriage boom marital births dropped 4 per cent, matched by an equivalent increase in the non-marital birth rate, pushing the percentage of non-marital births up by one-tenth, to just under 30 per cent of the total. Because it is the presence of children rather than marriage itself which today influences the participation of women in the labour force, this confusing lack of relationship between the recent marriage rate and the marital birth rate leaves open the question of whether the higher marriage rate of the last couple of years will hinder the movement of married women into the labour force in the period ahead. We shall simply have to wait until more detailed data becomes available.
It is clear however, that almost the whole of any increase in the proportion of married women in the labour market will have to take place amongst those who were aged 30 and over in 1997. The proportion of women aged 25-29 in our labour force is extremely high, almost 80 per cent, This is partly because barely a third of Irish women in this age group are married, a lower proportion than in any EU country other than Denmark and Finland.
The labour force proportion of this married element of 25- to 29year-old women is well above the European average, and is thus unlikely to increase by more than a few percentage points, adding, perhaps, no more than a thousand or so extra workers to the number of women of this age group who are already in the labour force. What is particularly interesting about this already heavily-employed 25- to 29-year-old age group is their high level of education. In 1997 the proportion of this age group at work who had higher education was already 30 per cent, almost one-third higher than for the rest of the EU. Only Belgium recorded a higher figure for workers in this age group.
Our proportion of 20- to 24-year-olds in the labour force is also relatively high, simply because the number of this age group who are still in the educational system tends to be lower here than elsewhere. This reflects a combination of earlier entry to higher education in Ireland, as well as shorter courses in some faculties.
(Despite earlier entry and some shorter courses, the standards of our university qualifications, independently monitored by extern examiners drawn mainly from outside the State, are high, reflecting the strong motivation of Irish students and of teaching staffs.)
This is why married women over 30 will have to provide the great bulk of any increase in the labour force deriving from the entry, or in the great majority of cases re-entry, of married women to our labour force. And this inflow of married women in their 30s and 40s is unlikely to be as significant a factor as some may believe to be the case.