Irish Economy
One quarter of Irish households jobless; More than double EU average
By Michael Hennigan, Finfacts founder and editor
Jun 19, 2014 - 12:31 PM

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Ireland has a very high level of households where no-one is working or has very limited access to work.  Almost one quarter of households in Ireland can be described as jobless compared to a European Union (EU) average of 11%.

The National Economic and Social Council, a public agency that has participation of the social partners and reports to the taoiseach, says in a report [pdf] published today that  a distinguishing feature of Ireland’s jobless households is the likelihood that they contain children, with children making up nearly a third of those in jobless households.  These households have a high risk of poverty, with the danger of transmitting joblessness and poverty across generations. 

The NESC says that jobless households comprise a mix of circumstances: people who are unemployed, who are working in the home, who are ill or disabled, and students.

The risk of being in a jobless household is related to the employability of those in the household and the household’s structure.  Those who live in jobless households are more likely to have no educational qualifications, to have never worked or to be in the unskilled social class.  They are also more likely to be renting their accommodation, to be single or parenting alone, and to either have a disability or to live with someone with a disability.

"The reasons for household joblessness are complex but are related to three main factors," said Helen Johnston, the report’s author. "The first factor is the interaction between the tax and social welfare system and the transition from welfare to work. The second factor is related to the availability of jobs and whether the skills of those in jobless households match the requirements of the job. The third, and often overlooked, factor is the specific characteristics of the jobless household, such as the age, level of education and skills, and the health of the adults in the household, as well as the age and number of children."

In 2012 the Economic and Social Research Institute (ESRI) published research showing that in 2007, before the recession began, Ireland also had the highest proportion of jobless households in the zone.

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% and 7.5% respectively. The report noted that Ireland had an unusually high percentage of jobless households when the economy and employment levels were growing strongly.

“Even during the boom years of the early 2000s, the rate of joblessness at household level was very high by European standards,” the ESRI study said.

The ESRI research found that the percentage of people in jobless households increased from 15% in 2007 to 22% in 2010 - the NESC report today is in effect analysing ESRI research

Ireland had the highest rate of jobless households in the Eurozone in 2007, according to the Eurostat data the report used. 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% of the total. The average across the euro zone in 2007 was just below 10%.

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.

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