How can you have 23% Jobless households with 10% unemployment?

Brendan Burgess

Brendan Burgess

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Update: I have summarised the results of this thread in a new thread:

Why do more Irish people live in jobless households than in the rest of the EU?

Extract from an article I had in yesterday's Sunday Independent - I have started a new thread on it to try to understand the figures.

http://www.independent.ie/opinion/c...antle-our-culture-of-dependency-34963409.html

In Ireland 77pc of working households are funding the other 23pc - that's twice the average of other EU countries


There is one outstanding statistic about Irish society which is very rarely reported.

Despite having average levels of unemployment, we have the highest percentage of jobless families in the original EU-15 countries, which includes Greece, Spain and Portugal. But it's not just a little more than average, it's twice the average. The average is 11pc but in Ireland, it's 23pc. The next closest to us is the UK at 13pc.

So whereas in other EU countries, 89pc of households work and fund the 11pc who don't work, in Ireland, 77pc of working households are funding the other 23pc who don't work.
 
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sahd said:
According to CSO figures for 2015 the percentage of the population under 60 in jobless households in Ireland was 13.2% - not 23%. The highest it was in recent years was 17.2% in 2012
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Hi sahd

Thanks for those updates.

I used the figures from the CSO's SILC survey as quoted by the NESC report:
Jobless Households: An Exploration of the Issues - NESC

upload_2016-8-15_11-44-24.png

Your data refers to something else entirely:

- the percentage of the population vs. the number of jobless households
- under 60 vs. all ages.

Do you know if there is any comparable data to yours for the rest of the EU?

I have always been shocked by the 23% figure and I have never seen an adequate explanation. Those trying to explain it would never dare to suggest that it might be because the welfare system is too high.

But I still don't understand how we can have average unemployment levels and twice average household jobless levels. Given the CSO's publication of GDP growth of 27%, I wonder if there is some statistical explanation for at least some of it.

Even if there is some such explanation, it doesn't take from the general point that we are paying social welfare rates and benefits which discourage people from working in low paid jobs.

Brendan
 
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Boss that NESC report possibly resolves your conundrum. It is too long to read but it does cite Social Welfare traps as one cause. Statistically a possible reason is the ratio of children (who are jobless but not unemployed) to unemployed people. Say unemployed people had on average twice as many children in Ireland as in the EU then that would cause a big distortion in the ratio of "in jobless households" to unemployed. Let's say this is an element of the explanation. We then ask is it because the Irish unemployed are more fertile. That seems unlikely. Much more likely is that those with children find SW a more compelling proposition than going to work - in other words supporting your argument.
 
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The figure of 23% of non working households comes apparently from 2010.
Unemployment rates peaked in Q4 2010 at 14.7% whereas July 2016 rates stand at 7.8 % which would hopefully lower the 23 % figure
 
Duke of Marmalade said:
Say unemployed people had on average twice as many children in Ireland as in the EU then that would cause a big distortion in the ratio of "in jobless households" to unemployed.
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Hi Duke

That doesn't explain it. This table refers to the number of jobless households and not the number of people living in jobless households.

So John and Mary and their 6 children are one jobless household.

Here are the figures for the percentage of "living in jobless households"

upload_2016-8-15_14-32-40.png

We are higher than average on one measure and lower on the other.

Brendan
 
Boss these stats are making my head sore. Spain and Portugal come out "best in class" in that last Table and I though they were basket cases.:oops:
 
Deiseblue said:
The figure of 23% of non working households comes apparently from 2010.
Unemployment rates peaked in Q4 2010 at 14.7% whereas July 2016 rates stand at 7.8 % which would hopefully lower the 23 % figure
Click to expand...

Note that unemployment is not the same as joblessness.
 
Hi Protocol

I wasn't aware of the up to date figures. Thanks for them.

So as of 2013, we still had twice the EU level of jobless households. Greece and Spain have crept up towards our levels which you would expect as their unemployment has increased.

Brendan
 
Duke of Marmalade said:
Boss these stats are making my head sore. Spain and Portugal come out "best in class" in that last Table and I though they were basket cases.:oops:
Click to expand...

I tried to reconcile 10% unemployment with 23% jobless families, and I can't figure it out. I will try to get an explanation from the CSO.

Brendan
 
Brendan Burgess said:
I tried to reconcile 10% unemployment with 23% jobless families, and I can't figure it out. I will try to get an explanation from the CSO.

Brendan
Click to expand...
The answer is in Fig. 3.3 of the report no. 3, see my previous post.

upload_2016-8-15_15-47-1.png

Also read the text around Fig. 3.3 and Fig 3.4
 
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Ireland has a higher level of inactivity by working-age adults than other countries. See Fig 3.4.

But what makes the VLWI figure really stand out, is that inactive people in Irl tend to live with other inactive people.


Example: inactive person lives with worker, 50% Work Intensity, so they are not in the VLWI category.

So you could have high unemployment, but still an average VLWI rate, as long as the inactive adults tended to live with other active adults.


BUT

In Ireland, see page 38,

"Ireland is at the lower end: only 51 per cent of jobless adults of working age in Ireland live with at least one working adult. This will contribute to a high rate of very low work intensity because the non-working adult will not be drawn out of the VLWI category by other working adults in the household."

Difficult to get your head around, isn't it?
 
2008 and 2014 VLWI data

People_living_in_households_with_very_low_work_intensity%2C_by_country%2C_2008_and_2014.JPG
 
There is great reading in that. I will study it in the morning when I am fresher.
From PDF page 55

3.5 Work Intensity and Living Arrangements
In the previous section we highlighted the role played in Ireland by the high level of
joblessness in recent years among the working-age population compared to other
European countries. In this section we now consider the impact of the living
arrangements of jobless people of working age and how it might differ between
Ireland and the other European countries. We focus first on the extent to which
jobless adults live with someone who is in employment.

It is worth noting that, all things being equal, a household with more adults is less
likely to be very low work intensity. Even if employment were equally distributed
across adults in different types of household, we would expect the VLWI rate to be
higher in one-adult households. This is because where there is only one adult in the
household, the work intensity of the household depends solely on the employment of
that adult. For example, assume an employment rate was 0.55 – implying a nonemployment
rate of 0.45, assuming further that employment is evenly distributed
across household types, and that the employment of both partners in a couple
household is independent. In this case, the probability of very low work intensity is
0.45 for a one-adult household and 0.20 (=0.45*0.45) for a couple household. In
other words, if employment were equally distributed across persons, the odds of
being in a VLWI household would be lower for households containing more adults –
simply by virtue of the number of adults in the household.

In Figure 3.5 we show the percentage of jobless adults who live with at least one
working adult. There is wide variation in this respect across countries, from a low of
38 per cent in Denmark to a high of 73 per cent in Luxembourg. At the lower end we
find the Scandinavian countries and at the upper end Spain, Italy, Greece and
Portugal as well as Luxembourg. Ireland is at the lower end: only 51 per cent of
jobless adults of working age in Ireland live with at least one working adult. This will
contribute to a high rate of very low work intensity because the non-working adult will
not be drawn out of the VLWI category by other working adults in the household.
 
Brendan Burgess said:
I tried to reconcile 10% unemployment with 23% jobless families, and I can't figure it out.
Brendan
Click to expand...

I have great faith in the OECD databases. These show that in the quarter to June 2016 Ireland had a harmonized unemployment rate of 7.6% of the labour force. http://stats.oecd.org/index.aspx?queryid=36324. Unemployment relates to individuals that are part of the labour force.

Joblessness relates to households. Even where unemployment is low, the percentage of persons living in households headed by a person of working age who does not have a job may be high. This is joblessness. Jobless persons may not be in the labour force and not seeking work, but may be in receipt of Jobseekers' Allowance.

In the past the OECD has expressed concerns on the Jobseeker’s Allowance, that it is relatively generous; is time-unlimited; and provides weak incentives for work, especially for low-skilled persons.
 
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Protocol

I am really working hard reading that report. It's very interesting. It seems that the figures relate to people up to the age of 59 only. I had assumed it included pensioners.

upload_2016-8-16_10-1-17.png

My main point is that we have 77 working households supporting 23 jobless households. In other words there are around 4 working households supporting each jobless household. Whereas in the rest of the EU 15, there are 9 working households for each jobless household.

But the definitions of jobless, unemployment, what age group we refer to , changes all that.

Do you know if there are any statistics to show the percentage of adult social welfare recipients in Ireland compared to the rest of the EU?

For example, do we have 4 working for each person in receipt of social welfare, compared to 8 to 1 in the rest of the EU?
 
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I have read the report and I am still struggling with it.

I have attached Chapter 3. Maybe someone else can explain or summarise it to show how we can have twice the level of jobless households with only a slightly higher level of unemployment.

Brendan
 

Attachments

  • Chapter 3 Very Low Work Intensity in Europe.pdf
    284.8 KB · Views: 2
Here is the summary explanation, which I still am trying to get my head around

1 Why is the Very Low Work Intensity Rate So High in Ireland?
Very low work intensity occurs when the working-age adults in a household spend
less than one fifth of the potential working time actually at work over the reference
year. Working-age adults are those aged 18 to 59, excluding students under age 25.
The VLWI indicator is one of three measures of being at risk of poverty or exclusion
(along with at-risk-of-poverty and severe material deprivation) for the purposes of the
EU 2020 strategy. Ireland has a much higher rate of very low work intensity than any
other European country. In 2010, the rate was 23 per cent in Ireland, compared to 13
per cent in the next highest EU country, the UK.

There was a sharp increase in very low work intensity in Ireland following the start of
the recession in 2008 – sharper than in the other EU countries – but the rate had
been high in Ireland even during the boom years of 2007 and earlier. The VLWI rate
in Ireland in 2005 was 15 per cent compared to an average rate of 10 per cent in the
EU 15.

Part of the high level in Ireland is explained by the high level of joblessness among
the working-age population. In 2009, Ireland had the highest European level of
economic inactivity at 42 per cent of the working-age population. However, this
inactivity rate on its own is not enough to account for the exceptionally high rate of
very low work intensity in Ireland. For an explanation of this, we needed to look as
well as the living arrangements of inactive working-age adults. If jobless adults in
Ireland are less likely to live with someone who works and more likely to live with
children compared to jobless adults in the EU generally, this would contribute to a
much higher rate of very low work intensity than we would expect based on the adult
joblessness rate alone.

Indeed a detailed examination of the 2009 EU-SILC data showed that in Ireland
fewer inactive working-age adults lived with someone who was at work than in other
EU countries. In Ireland, only about one half of jobless working-age adults live with
someone who works – one of the lowest rates in the EU. Additionally, in Ireland the
majority of adults in VLWI households lived with children (56 per cent) and the
average number of children in these households is among the largest in Europe
(1.8). Since the work intensity of the adults is assigned to all children in the
household in calculating the overall VLWI rate, the fact that jobless adults live with
children means that the impact of joblessness is multiplied by the number of children
living with the jobless adult.

Overall then, we need to take account of individual economic activity, household and
family structure and the impact of the recession in order to understand
the exceptionally high VLWI rate in Ireland in 2010.
 
Here is the short answer as to why the rate of VLWI is so high:

(1) In 2009, Ireland had the highest European level of economic inactivity at 42 per cent of the working-age population.


We have more adults classified as unemployed / disabled / ill / carers, than in other countries.

Unemployment might be falling, but inactivity could still be high, or not fall as much.

Or unemployment could be below some other country, yet our inactivity rate could be higher than that same other country.

Others [e.g. David McWilliams] have written about the rise in numbers on disability payments, even though the country is healthier.


(2) However, this inactivity rate on its own is not enough to account for the exceptionally high rate of very low work intensity in Ireland.

For an explanation of this, we needed to look as well as the living arrangements of inactive working-age adults. If jobless adults in Ireland are less likely to live with someone who works and more likely to live with children compared to jobless adults in the EU generally, this would contribute to a much higher rate of very low work intensity than we would expect based on the adult joblessness rate alone.


So this second reason is about the distribution of work across households. It seems that jobless adults here are less likely to live with a working adult than in other countries. The working adult would lift the household out of the VLWI category. But that tends not to happen here.
 
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