Tuesday, December 21, 2010

Employment and Unemployment

We know that Ireland currently has 299,000 people classified as unemployed by the CSO.  This is an increase of nearly 200,000 since the peak of employment was achieved in the middle of 2007.  However, in the fall from this peak the number of people in employment has fallen by nearly 300,000.

Our unemployment figures understate the destruction of jobs in the economy by almost 100,000.  A lot of people have left the ranks of the employed but have not added to the numbers unemployed.  This gap is substantial.

All Cumulative Changes

This gap have significant consequences.  It gives a lower unemployment rate than might otherwise be the case.  It ‘saves’ the government substantial social welfare payments which it would otherwise have to meet.

Where did these 100,000 people go?

About 1/4 of the answer is to be found in the changes to the numbers for Irish Nationals.  The gap for Irish nationals is likely a combination of a number of factors

  • people leaving the labour force or reaching retirement age
  • people continuing or returning to education
  • people emigrating

Irish Cumulative Changes

The remaining 3/4 can be see if we look at non-Irish nationals and it is likely that most of this is down to people leaving the country.

Non-Irish Cumulative Changes

The numbers of non-Irish nationals who are classified as unemployed is essentially unchanged since the start of 2009 even as the number employed has continued to fall relatively unabated.

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