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Growing together: Towards a more inclusive Ireland

Author

Listed:
  • David Haugh

    (OECD)

  • Yosuke Jin

    (OECD)

  • Alberto González Pandiella

    (OECD)

Abstract

The Irish economy is growing strongly, but there is a risk many households will be left behind despite robust growth. High joblessness especially among the low-educated and skill-biased wage differentials have induced high market income inequality, among the highest in the OECD. Ireland’s comprehensive welfare system provides a broad range of social benefits, which keeps jobless households out of poverty, but this reduces the financial incentives to work, especially for families with children. Structural unemployment is also explained by the lack of skills required to find employment in the Irish labour market, where the presence of multinational enterprises increases the reward for high skills and the penalty for poor skills. With the unemployed pool lacking the right skills and financial incentives, employers tend to resort to foreign workers, a practice facilitated by the well-functioning migration system. Getting more people into work is important to share the benefits of the recovery as widely as possible. This requires building up work capacity, especially by improving jobseekers’ training, and ensuring welfare recipients honour their Job Path commitments in return. More needs to be done to increase incentive to work by reducing welfare and low-income traps. This should be done by shifting the tax burden from labour to indirect taxes in a progressive way that does not harm the lowest income groups. (www.oecd.org/eco/surveys/economic-survey-ireland.htm). Grandir ensemble : Vers une Irlande plus inclusive La croissance de l'économie irlandaise est forte, mais il y a un risque que nombreux ménages restent à l’écart de cette croissance robuste. Le chômage élevé, surtout parmi les personnes peu instruites, et les différences de salaires basées sur les compétences, ont induit une forte inégalité des revenus avant impôts et transferts, , qui se situe parmi les plus élevées de l'OCDE. Le système de protection sociale élargi de l'Irlande offre une vaste gamme de prestations sociales, qui évite la pauvreté pour les ménages sans emploi , mais qui réduit les incitations financières au travail, en particulier pour les familles avec enfants. Le chômage structurel est également expliqué par le manque de compétences nécessaires pour trouver un emploi sur le marché du travail irlandais, où les entreprises multinationales recherchent des compétences élevées, ce qui pénalise qui n’ont pas les qualifications requises. Etant donné que les demandeurs d’emploi irlandais n’ont souvent pas les compétences requises et font face à peu d’incitations financières, les employeurs ont tendance à recourir à des travailleurs étrangers, une pratique facilitée par le système dímmigration qui fonctionne bien. Faciliter le retour à l’emploi est important pour parvenir à un partage partager des fruits de la reprise aussi large que possible. Cela nécessite d’améliorer le socle des compétences, et notamment la formation des demandeurs d'emploi, et d'assurer que les bénéficiaires de prestations sociales respectent leurs engagements en termes de retour à l’emploi. Plus doit être fait pour accroître les incitations au travail et pour réduire les trappes dans les bas revenus et les prestations sociales, . Cela devrait être fait en transférant la pression fiscale pesant sur le travail vers les impôts indirects, d'une manière progressive afin de ne pas nuire pas aux groupes à faible revenu. (www.oecd.org/fr/eco/etudes/etude-economique-irlande.htm).

Suggested Citation

  • David Haugh & Yosuke Jin & Alberto González Pandiella, 2016. "Growing together: Towards a more inclusive Ireland," OECD Economics Department Working Papers 1293, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:1293-en
    DOI: 10.1787/5jm0s927f5vk-en
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    Cited by:

    1. Seán Kennedy & Yosuke Jin & David Haugh & Patrick Lenain, 2016. "Taxes, Income and Economic Mobility in Ireland: New Evidence from Tax Records Data," The Economic and Social Review, Economic and Social Studies, vol. 47(1), pages 109-153.

    More about this item

    Keywords

    labour market reform; réforme du marché du travail; skills; turnover;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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