The boom of the 1990’s, or “Celtic Tiger” as it is now referred to, was a complete turnaround for the Irish economy. It was, by contrast to the 1980’s, a period of economic success, with rapid growth of GDP per person moving Ireland up the living standards league table. The high unemployment rates of the 1980’s fell to a rate of approximately 3.4% in November 2000. The annual real growth rate of the Irish economy between 1993 and 2001 more than doubled the average recorded over the previous decade – 8% compared with 3.5%. – Clinch, P., Convery, F. & Walsh, B., (2002) (pp. 24 – 30). Numbers at work rose by over 45%, and the high net emigration rate of the 1980’s was replaced by the highest net immigration rate in the EU.
Employment Growth:
The Labour Force
Labour force trends over the past two decades have been erratic, alternating between periods of very rapid growth as in the 1990’s, and periods of contraction, as during the 1980s. Trends in the labour force over the past twenty years or so reflect not only underlying demographic trends in the adult population, but also changes in women’s labour force participation, levels of participation in education and education levels of the labour force, retirement patterns and to a large extent, migration - O’ Connell, Philip J., (2000). Below are these principal factors, which have made an impact on employment growth and labour force trends:
Population Growth & Emigration/Immigration:
Between 1981 and 2001, the population of those aged between 15 and 64 years and over, (i.e. the working adult population), has consistently increased; there was a strong underlying growth over the entire period, as shown in Graph 1, titled “Irish Population Aged 15 – 64 Years, 1980 – 2001). However, during 1980’s, growth in the labour force and the adult population was reduced by net emigration, which peaked in the latter half of this period. The reversal of net migration, i.e. the immigration into Ireland, since 1991, due to the economic boom, meant that the adult population grew unhindered by 14 percent between 1991 and 1999. - O’ Connell, Philip J., (2000).
Graph 1:
Source: Statistics from World Development Indicator Online: www.worldbank.org
Female Labour Force Participation:
There has been a marked increase in women’s labour force participation over the past twenty years. Historically, women’s labour force participation in Ireland has been low, and it has been argued that it lagged behind what might be expected from the rapid industrialisation of the economy since the 1960’s.During the 1980’s, the female Labour Force Participation Rate was sluggish, 29.7% in 1981, and 32% in 1986, as can be seen from Table 1 below. During the 1990’s however, it increased dramatically, to 35% in 1991 and to 44% in 1999, also shown in Table 1. Total employment among women grew strongly during 1988 and 1999. By 1999 the total number of women at work was more than two thirds higher than it had been in 1981. This rise in female labour force participation rates can be accounted for by the higher levels of education and lower levels of fertility rates, meaning that women had less children, and so continued or returned to work. - Fahey, T., Russell, H. & Smyth, E., (2000), (pp. 252 – 262).
Table 1: Female Labour Force Participation Rates (000’s)
Source: Central Statistics Office, various years, Census of Population and Quarterly National Household Survey, 1999, Q4.
Labour Force Education:
Another underlying factor influencing labour market trends results from increased educational participation. Total numbers engaged in education increased from 200,000 in 1981 to 283,000 in 1999 and to 359,000 in 1999. - Tansey, Paul, (1998). Therefore, the numbers in education increased by 80 percent over the 1980 – 1989 period, and by 27 percent from the beginning to the end of the 1990’s. This had two effects:
- It radically reduced the number of young people in the labour force, and
- As noted above, led to increased labour force participation among women.
The reason for this shift towards higher and more prolonged levels of education of the Irish Labour Force is the global shift from a manual skilled, industrial, agricultural based workforce, in the early 1980’s, to a service sector and knowledge based workforce in the 1990’s. With globalisation and competition, came the need for a highly educated workforce, with companies now considering an educated workforce as a major asset, and as competitive advantage.
General Growth:
As the economy stalled in the first half of the 1980’s, employment declined sharply.
Contraction in employment, combined with labour force growth resulted in an increase in the unemployment rate from just under 10% of the labour force in 1981, to a peak of almost 17% in 1987. But even when levels of economic activity revived from 1987 onwards, employment was slow to respond - Tansey, Paul (1998).
The 1990’s showed a remarkable turnaround in Irish economic fortunes, with growth in GDP amounting to 79% over the decade, giving rise to increases in employment in the 1990’s, to a marked fall in unemployment, as can be seen from Table 2 below, with a fall from 228,000 unemployed in 1986, to just 65,000 in 2001.
Table 2: Total at work,Unemployed, Labour Force and Net Migration 1986-2001
Source: Labour Force Survey 1986 – 2001.
During this period, employment was at 95%, well above the EU average and employment grew at 5% per annum for the previous five years. As can be seen from graph 2 below, there was a substantial increase in employment during the years 1986 and 2001, with employment in 1986 at 1,028,000 workers, rising in 2001 to almost full levels, of 1,717,000 workers in 2001.
Graph 2:
Source: Labour Force Survey 1986 – 2001.
Composition:
Employment by sector:
Over the past twenty years or so, Ireland has seen a substantial turnaround in sectoral employment, with the numbers employed within the agricultural sector becoming decreasing steadily, and with a quite large shift towards and focus on the services
sector. The now relatively small size of the agricultural sector can be seen from Table 3 below, the sector having seen a substantial decrease in the numbers of employees during the period of 1980-2000. Employment in Agriculture decreased dramatically, from an overall 17% of total employment in 1983, to an all time low of just 8% of total employment in 2000. As can be seen from Table 3, employment in the services sector increased substantially during the same period, from 53% of total employment in 1983 to 64% of total employment in 2000. These figures and data reflect the change of Ireland’s workforce, from one focused on manual labour and unskilled work, to one focusing on skills and services, and an educated workforce.
Table 3: Employment in Ireland by Sector, 1980 –2000.
Source: Statistics from World Development Indicator Online:
Part-Time and Temporary Employment:
Over the period of 1980-2003, there has been a significant rise in part-time employment in Ireland, especially among women. The share of part time work is now at 16.5%. Ireland is below the EU average of part time work, which stands at 17.9% of all employees. The amount of men in part time employment has risen modestly by 3.9% from a small base of 2.5 to 6.6%. The more remarkable growth in part time employment is among women, of whom 30.5% in employment were part time employed in 2001, as seen graph 3 below, entitled “Part-time employed Women and Men in Ireland and the EU 1986-2001”. Using these statistics, it is clear to see there is a marked gender difference in relation to part-time employment, with a high number of female employees in part time employment.
Graph 3:
Source: Employment in Europe 2002: Recent Trends and Prospects, European Commission, 2002.
Temporary employment in Ireland is relatively low in comparison to permanent full time work; only 4 percent of males and 6 percent of females are in full time temporary employment. However, as might be expected, a much higher proportion of males and female working in part time employment have this employment on a temporary basis – 61 percent of all male part-time employment in Ireland and 33 percent in the case of females, is temporary. - O’ Hagan, J. W., (ed.), (2000).
Future Prospects:
The short-term outlook for the economy is for considerably lower growth. - FÁS (2002). This slowdown in economic growth will obviously have adverse implications for employment growth. Employment levels are expected to fall in the short term.
Most employment sectors expect further falling levels of employment in the future, with the only industrial sectors anticipating employment increases the man made fibres and office and data processing equipment sectors. – FÁS (2002).
However, while employment expectations are poor in the short term, the medium term outlook is much more positive and this should translate into significant job creation over the next few years. Employment rates are expected to average 3 percent for each year during the 2004 – 2007 period. The basis for this is a prediction of the continuation of the full employment situation in the medium term.
Over the next decade, the ESRI estimates that three human capital intensive sectors – high tech manufacturing, other market services and health/education, will account for some 75 percent of total employment growth.
Due to the increased importance of a knowledge and information based workforce, the numbers employed in agriculture and manual skills work will decrease further. By 2015, it is expected that 71 percent of employment will be in the services sector. – FÁS (2002). Further education and upgrading of qualifications is a must, as companies employing in the services sector will demand a highly educated, intelligent and skilled workforce.
Conclusion:
The period of 1980 to the present day in terms of economic growth and employment growth is unique in Irish history. Never before has Ireland experienced such a turnaround in economic fortunes, from the depression and recession, high unemployment rates and low living standards of the 1980’s, to the economic boom, almost full employment levels and living standards above the EU average of the mid to late1990’s, as outlined above. Ireland has come an extremely long way in terms of employment levels, although recently this extraordinary growth has seemed to level off, to relatively normal growth rates in relation to the rest of the EU. As outlined above, female participation rates in employment have increased, Ireland’s workforce is becoming highly educated and has moved into a more knowledge and information based environment. This period in Irish economic history is unlikely to be repeated. The long-term outlook for the future is good, with an average annual growth rate equal to the EU average expected.
The unemployment rate peaked at approximately 17% of the Irish labour force in 1986, according to the Central Statistics Office.
Part time work in Ireland is described as those workers who work less then 30 hours a week.
Temporary employment is defined as where a worker is employed by a firm under a fixed-term contract. - O’ Hagan, J. W., (ed.), (2000)
ESRI Medium Term Review 2001 – 2007.
As mentioned previously, companies now look at a highly educated workforce as an extremely valuable asset and as a means of competitive advantage.