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

Brendan Burgess

Brendan Burgess

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In 2009, 23% of Irish people between the ages of 0 and 59 lived in a jobless household. The equivalent figure for the EU -15 was 11%. The next highest was the UK at 13%.

What this means

I have used the figures for 2009, as they have been the subject of detailed studies by the ESRI and NESC and so there is a lot more detail available about them. They are based on the CSO's SILC (Survey of Income and Living Conditions) published in 2010, but the information was collected in 2009.

While the figures are for 2009, the figures for 2014 are very similar. We still had twice the European average of people living in jobless households.

It includes everyone from the age of 0 to 59. So children are included. Anyone from 60 upwards is excluded, whether they are working or not.

While the principal cause of joblessness is unemployment, people are also jobless due to home duties, illness and being full-time students.

A jobless household is defined as one where the average time worked in the last year by adults of 18 or over was less than 20%. So a person who is living on their own who worked for one month last year, was a jobless household. A couple where one person worked full-time, and the other did not work at all, was not a jobless household. A couple where one person worked full-time and had a non-working wife and adult student living with them, was not a jobless household, as the average time worked was 33%.

What this does not mean

It does not mean, as my article suggested, and as many other reports have suggested "that 23% of households are jobless". The 23% refers to the number of people living in jobless households. I have not been able to find any figures for jobless households.

Caveat
These figures are based on the SILC. The Central Statistics Office now says that these overestimate the level of people living in jobless households. I discuss this later in this thread.
 
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Why do more Irish people live in jobless households than in the rest of the EU?

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Adapted from Watson et al.,: Work and Poverty in Ireland


Generally speaking, the higher the rate of joblessness, the higher the rate of people living in jobless households. In simple terms, if everyone were working, there would be no children living in jobless homes. So the higher adult joblessness rate in Ireland leads to a higher number of people living in jobless households.

If a woman has a job and her husband is jobless, that household is not jobless. If a person living on their own is jobless, then they are automatically living in a jobless household. In Ireland, we have a lower proportion of jobless adults living with other adults in employment, so this raises the total number of people living in jobless households.

But the huge difference between Ireland and the rest of the EU 15 is the fact that 56% of adults in jobless households have children living with them. It's less than half that in the EU 15. In other words, most jobless adults in the EU 15 do not have children living with them. This brings down the number of people living in jobless households.

This last issue is accentuated by the fact that where an Irish jobless adult living in a jobless household has children living with them,they have more children living with them than the average EU.

How might 42% joblessness result in 23% living in jobless households?

I have tried to come up with a model to show how the figures for Ireland might result in 23% of people living in jobless households. I have made many assumptions to convert 42% into 23%. I don't know how realistic those assumptions are. This area is worthy of further investigation. If a similar exercise were done for the EU average, we might learn something very significant.

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Why do we have a higher rate of jobless adults in Ireland?

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Extracted from Figure 3.4 in ESRI report
 

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Here are the SILC data for 2008 and 2014, courtesy of Poster Protocol

In 2014, twice as many people aged 0 - 59 were living in jobless households in Ireland than were living in jobless households in the EU 28

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Proportion of population aged less than 60 living in households with very low work intensity, by household type, 2013
(Extracted from Eurostat, courtesy of Protocol)

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I am not 100% sure what this tells us.

I think it is that in Ireland, 52% of single people with dependent children are living in jobless households but only 29% of EU 28 single people with dependent children are.
 
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The ESRI has published more recent figures and have used a different definition of joblessness.

People living in jobless households in 2014

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Only Ireland and the UK have more children than adults living in jobless households.

The definition of joblessness is that used in the context of the EU Labour Force
Survey (EU-LFS): the share of persons under the age of 60 in households where
nobody is in employment. The ILO definition of employment
sets a low threshold, since even as little as one hour at work in the reference week
would be enough to define a household as ‘non-jobless’ or ‘working’. However, in
practice, there are very few working households where the only employment is a
very small number of hours by one adult.

The SILC definition is:
‘Very low work intensity’ is defined as being in a household
with a work intensity level lower than 20 per cent of potential working time. Essentially, this is equivalent to a household where no adult has worked full-time or part-time during the year.
 
Any update on these figures?

With unemployment down to 6%, I would expect the numbers of those living in jobless households to have fallen.

Brendan
 
Note that we have a structural and cyclical problem of low activity and employment.

What that means is even if the UNR is 6% or less, we will still have very high rates of VLWI.

Why?

We have more households headed by people categorised as disabled / caring / home makers / unemployed than other countries.

In other countries, many poor people have some market income.

Here, average market earned income in the poorest decile is about 10 euro per week, I.e. zero for most people.
 
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Note that although the welfare system is fairly good at reducing poverty, the poverty rate before the State intervenes is really, really high.

50% of people would be in relative income poverty before State intervention, reduced to 16% after taxes and transfers.

Why is the pre transfer rate so high?

There is an endogenity in the system.

The welfare State that is fairly good at reducing poverty is itself partly to cause for the very high rates of pre-transfer poverty.
 
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Hi Protocol

That is a very good point.

Because we have such high welfare rates in Ireland, people choose not to work.

If you reduced the welfare rates, more people would work and we would reduce the level of poverty before welfare.

Brendan
 
Protocol said:
We have more households headed by people categorised as disabled / caring / home makers / unemployed than other countries.
Click to expand...

What about single parents?

Jobless households in Ireland seem to have more children than households where someone is working.

Brendan
 
I thought it would be interesting to compare these rates with the rates of unemployment in other EU countries in 2015.

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We had bang on the average unemployment rate, but twice the level of people living in jobless families.

Greece had 25.2% unemployment but fewer people living in families depending on social welfare

Brendan
 
Hi Brendan,

Have you come across any statistics on inter-generational welfare dependency?
 
Yes, what we have in Ireland is more a joblessness problem, rather than an unemployment problem.

Soon we will have 6% unemployment, maybe 130,000 people.

But there are 265,000 people on the Live Register.

And there are hundreds of thousands more working-age adults not active.

Our employment rate is 65%, well below the top rates of 75% achieved in some other countries.
 
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