Coronavirus will increase economic inequality in Irish society, says UCC study

Younger, male, less educated, non-nationals, self-employed and those located outside Dublin are economically most exposed under Covid-19 restrictions, a UCC report has indicated.
Coronavirus will increase economic inequality in Irish society, says UCC study

Younger, male, less educated, non-nationals, self-employed and those located outside Dublin are economically most exposed under Covid-19 restrictions, a University College Cork (UCC) report has indicated.

The authors of the report maintain that the Covid-19 crisis will increase economic inequality in Irish society.

Their analysis indicates that social distancing measures and remote working potential favours older, female, better educated, employees, Irish nationals and those located in the capital region.

The study by Dr Frank Crowley, Dr Justin Doran and Dr Geraldine Ryan uses Irish Census Individual and occupation data and economic indices developed from global O*NET data to examine who is most exposed in the workplace transition to social distancing and increased remote working.

Dr Ryan, Senior Lecturer in the Department of Accounting and Finance at Cork University Business School, said presently in most countries people are strongly prioritising health benefits over economic losses.

“The economic costs of these measures are large and a critical question for policymakers responding to the Covid-19 crisis is what types of people are most likely to bear the burden from the economic fallout? This report specifically deals with this question and our results indicate that the impacts are highly unequal across workers.”

The report illustrates how people are being impacted differently due to the Covid-19 restrictions.

Researchers have indicated that females have on average a higher occupational social distancing and remote working potential, relative to men.

Each extra step up the educational ladder has the pay-off of being able to socially distance in work and engage in remote work. As workers with higher levels of education have higher incomes, education disparities will be a key driver of inequality.

Researchers say that the social distancing measures and the opportunity for remote work will impact younger and older workers more than middle-aged individuals.

However, younger individuals are still clearly the disproportionately more impacted age group. The study shows that non-nationals are associated with a lower social distancing and remote working potential, relative to nationals.

This finding is consistent with other international studies identifying marginal groups to be more economically vulnerable in this crisis.

The report suggests that the geography of the economic crisis is likely to play out differently in Ireland, with individuals in all regions, experiencing lower social distancing potential relative to individuals in Dublin.

Self-employed individuals without paid employees suffer from lower social distancing and remote work potential.

"We use Irish census data that provides information on individual characteristics and global data which gives very detailed information of the tasks performed by individuals in their occupations,” commented co-author of the report, Dr Justin Doran, Economist at Cork University Business School.

He says the report identifies clear policy implications.

The present unemployment pandemic payment and the temporary wage subsidy scheme implemented by the government will continue to be a vital safety net in the months ahead.

Researchers believe the significant economic costs of the crisis and the types of groups affected; the prioritisation of health benefits over economic losses may need to be revisited as the crisis evolves.

Targeted policy responses will be critical in the medium and longer-term, including job reintegration, digital and portable reskilling, promoting entrepreneurship, and educational and job support initiatives to assist the workers most affected by the crisis.

Targeted policy responses but with a place sensitive approach, taking account of local context, and enhancing opportunities locally will be important in solving the societal and spatial inequalities that are likely to emerge. This means increasing intervention capacity at regional and local level will be important.

Dr Frank Crowley, Economist at Cork University Business School, said the winners and losers of the health-wealth trade-off is an element of the crisis that arguably needs closer attention.

“The inevitable trade-off also places policymakers in an unfortunate conundrum. The spread of Covid-19 costs lives, but also the crashing of the economy will damage livelihoods and communities. The types of individuals most at risk in this crisis are also those that were most economically vulnerable pre-Covid 19.

"Critically, the Covid-19 crisis is likely to further exacerbate existing economic inequalities in Irish society. Considering the significant economic costs of the crisis and the types of groups affected; the prioritization of health benefits over economic losses may need to be revisited as the crisis evolves.”

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