Earnings and Low Pay in the Republic of Ireland

A paper entitled 'Earnings and Low Pay in the Republic of Ireland' was delivered to a meeting of the Statistical and Social Inquiry Society of Ireland  on Thursday 14th April. The slides from the presentation are below and the paper (forthcoming in the SSISI journal) was based on an earlier NERI working paper available here.

Paper Summary:

Earnings and Low Pay in the Republic of Ireland

As signs of economic recovery continue to emerge, issues relating to quality of life, living standards, the provision of public services and adequacy of income are returning to the policy sphere. Included among these are issues related to earnings and pay levels. In early 2015 the Republic of Ireland’s Government appointed a Low Pay Commission to examine issues around low pay including minimum hourly rates and the conditions of workers, in particular those experiencing precarious employment patterns. This focus complements a broader consideration of pay levels in both the public and private sector and the emergence of a method for estimating an annual living wage for workers in the Republic.

This paper examines low pay both in the context of the distribution of earnings within the income distribution and the distribution of hourly earnings across all employees. While the analysis in the paper focuses on the latter, it is relevant to ground that assessment within the context of earnings among all workers, both employees and the self-employed. Overall the paper aims to provide greater clarity on the overall shape of earnings across the state and in particular to establish a more robust evidence base for our understanding of the nature and shape of low pay.

The paper is structured as follows. Section 2 considers the context for this examination including previous assessments of earnings and low pay in Ireland. The data and methods used in the analysis are then outlined in Section 3. Next Section 4 examines the distribution of earnings across all workers and sets this in the context of the overall income distribution. Section 5 then focuses on the distribution of employee hourly income and in particular those at the bottom of that distribution, the low paid, examining both the composition of those who are low paid and the risk of low pay faced by employees with different characteristics. Complementing this, multivariate methods are used in Section 6 to isolate the effects of various characteristics on the probability of being low paid. Finally, in Section 7 the paper considers some policy issues implied by the analysis before concluding.

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Micheál Collins