Work and Poverty in Ireland: an Analysis of SILC 2004-2010

Dorothy Watson, Bertrand Maître,

Chris Whelan

"Work and Poverty –

National and EU Perspectives"

11 December 2012

Motivation

“.... having a job remains the best safeguard against poverty and social exclusion [but] it does not prevent it. Raising employment rates is good but a significant share of adult Europeans at risk of poverty or social exclusion are working”.

DG Employment, 2011, Employment and Social Developments in Europe 2011.

Two Key Indicators

Measure Base and Measurement

Household Joblessness (Very Low Work Intensity)

Working-age adults spend less than one fifth of available time in employment Base: Persons age 0 to 59 Rate High in Ireland compared to EU

Two Key Indicators

Measure Base and Measurement

Household Joblessness (Very Low Work Intensity)

Working-age adults spend less than one fifth of available time in employment Base: Persons age 0 to 59 Rate High in Ireland compared to EU

In-work poverty (individual)

Working age adult in employment but living in a poor household Base: Persons in employment age 18 to 59 Rate Similar in Ireland to EU average

Questions Addressed

1. Why is the rate of household joblessness so high in Ireland, compared to other EU countries?

2. What impact has the recession had on household work patterns?

3. What are the characteristics of jobless households?

4. Has the relationship between joblessness and poverty changed over time?

5. How significant is in-work poverty in Ireland and

6. What are the characteristics of the in-work poor?

1. Why is the rate of Household Joblessness

so high in Ireland?

Percentage Household Joblessness: Ireland, UK and EU

EU-SILC. % persons age 0-59 in VLWI households

11

23

13

0

5

10

15

20

25

2005 2006 2007 2008 2009 2010

EU15 Ireland EU27 UK

All Adults 18-59, PES – EU-SILC 2009

12

13

5

8

2

0

5

10

15

20

25

30

35

40

45

SE DK NL FI FR DE AT EU15 LU PT BE GR ES IT IE

Unemployed Home duties Ill/Disability

Student etc. Other inactive & retired

% jobless adults age 18-59 living with an employed adult, EU-SILC 2009

51

10

20

30

40

50

60

70

80

DK SE FI IE BE DE EU15 NL FR AT ES IT GR PT LU

% adults in jobless households living with children, EU-SILC 2009

56

10

20

30

40

50

60

GR NL DK FI AT DE LU IT EU15 SE BE PT FR ES IE

2. What impact has the recession had on household

work patterns?

Couple Work Patterns, 2004-2010 Males and Females in Couple households

80%

64%

4% 8%

16%

28%

33% 35%

25% 22%

42% 43%

0%

20%

40%

60%

80%

100%

2004 2007 2010

Male work FT

Male Work PT

Male Not at work

Female Work FT

Female Work PT

Female Not at work

3. What are the Risk factors for Household Joblessness?

Odds of Very Low Work Intensity, 2004-2010

1.7

2.5

3.4

1.5

1.6

2.0

4.0

4.3

1.3

2.2

2.2

6.2

0.4

2.4

2.3

2.2

0.30 3.00 30.00

Under age 5 vs. 35-44

Age 55-59 vs. 35-44

Disability (adult) vs. none

Single vs. married

Widowed vs. married

Divorced/separated vs. married

Lives alone vs. adults+child

Lone parent vs adults+ children

Number children

No Educ quals vs. Upper 2nd level

Unskilled vs. Manager/Profess.

Never worked vs. Manager/Profess.

Purchasing vs. home owner

Loc Auth Renter vs. home owner

Priv Renter vs. home owner

Rent free vs. home owner

Profile of those in VLWI households in 2010

In 2010

65% householder has less than full 2nd level education

36% are children

18% are adults with a disability

41% some adult with a disability in the household

21% Lone Parent

47% Two adults with children

4. Has the relationship between household joblessness and

poverty changed over time?

Poverty in Jobless Households (2004-2010) including social transfers and before social transfers

70%

34%

96% 97%

0%

20%

40%

60%

80%

100%

2004 2007 2010

IncludingsocialTransfers

BeforeSocialTransfers

Basic Deprivation in Jobless Households, 2004-2010

51%

51%

0%

10%

20%

30%

40%

50%

60%

2004 2005 2006 2007 2008 2009 2010

5. How significant is in-work poverty in Ireland

Poverty in and out of work (Individual, age 18-59; % of individuals), 2004-2010

62% 63% 53%

4% 4%

4%

22% 24% 32%

11% 9% 10%

7% 8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2007 2010

Not in work, poor

Not in work, not poor

In work, poor

In work, not poor

In-Work Poverty Rate

6. What are the characteristics of the in-work

poor?

Odds of In-Work Poverty, 2004-2010 0.8

1.6

1.8

1.3

1.7

0.6

1.4

1.9

1.4

6.2

1.6

2.5

2.0

0.6

1.9

1.6

0.8

0.3 3.0 30.0

Female vs. male

Age 45-54 vs. 35-44

Age 55-59 vs. 35-44

Single vs. married

Divorced/separated vs. married

All adult HH vs. adults+child

Number of children

No Educ quals vs. Upper 2nd level

Lower 2nd vs. Upper 2nd level

Self-employed vs. Manager/Profess.

Tech, lo. sales/serv.vs. Manag./Profess.

Unskilled vs. Manager/Profess.

Part-time work vs. full-time

Purchaser vs. home owner

Local Auth. Renter vs. home owner

Private renter vs. home owner

2007 vs. 2004

Conclusions (1)

Household Joblessness adds value to the understanding of risk factors for social exclusion Broader than unemployment (considers other inactive statuses) Considers work in total household context

Adults in jobless households face more severe & complex barriers to

work They have lower levels of education Also challenges in terms of disability, Household composition (lone parenthood, larger number of children)

Change over time in association with income poverty

Weakening association since 2004, due to effectiveness of social transfers But situation with respect to deprivation has not changed

Conclusions (2)

In-work poverty –

Fewer people affected by in-work poverty than by

household joblessness

Not high by European standards

Slight increase with recession

Strong association with self-employment

Not especially disadvantaged in terms of education, family structure

Policy Implications

Household joblessness an important risk factor for social exclusion (acknowledged in new social targets)

Social transfers have been very important in moving jobless households above 60% poverty threshold – less impact at 70% threshold and on deprivation

Implications for labour market activation Broader population – more disadvantaged, more complex needs Need for targeting on training and employment support Other supports: childcare, support for carers, people with

disability

Careful planning of pathway to work Rate at which social welfare benefits withdrawn Guard against inadvertent increase in in-work poverty

Thank you

Two Key Indicators

Measure Base and Measurement

Household Joblessness (Very Low Work Intensity)

Base population: Age 0-59 Measure: Proportion of available person months over past year spent at work by working age adults; adjusting for hours worked. Excluded: adults age 60+; households with no working-age adults Very Low Work Intensity (<20%) is a key social exclusion indicator. Rate High in Ireland compared to EU

In-work poverty (individual)

Base: Person aged 18-59 in employment Measure: Poverty status of persons of working age in employment Excludes: Persons not of working age; persons not at work