Women over 35 are driving Ireland's post-pandemic employment growth

The Central Bank’s analysis suggested that the higher levels of participation for women could be sustained into the future, providing a boost to overall labour supply and supporting economic growth.

Ireland’s employment growth in the last year was driven mainly by women over 35 and younger people joining the workforce, the Central Bank has found.

In the regulator’s latest Signed Article, which analyses labour market recovery after the pandemic, remote working was not the leading reason for the increase in women in the workforce.

“Our research suggests that there is no strong evidence to date that changes during the pandemic, like a move to hybrid or fully remote working, were the dominant factors supporting the recovery in employment over recent quarters,” said research economist at the Central Bank Tara McIndoe-Calder.

“Instead, the participation expansion related largely to under-25s and women over the age of 35, who tend to respond strongly to how rapidly the economy is growing,” she added.

The leading factors that led to an increase number of women in jobs are the rise in educational and occupational skill-level attainment for women, said the Central Bank.

“Women over 35 had seen increases in their labour force participation for underlying societal and structural reasons that pre-date the pandemic and is expected to continue for some time to come,” said Ms McIndoe-Calder.

The Central Bank’s analysis suggested that the higher levels of participation for women could be sustained into the future, providing a boost to overall labour supply and supporting economic growth.

The participation gains for under 25s could also be maintained as these cohorts are working while participating in education, said the banking regulator.

At the end of 2021, 2.5 million were in employment in Ireland, which is the highest on record. The Central Bank said that this was due to the domestic labour force, with migration playing a smaller role.

“This strong employment growth has occurred without a notable surge in inward migration rather, the employment gains were supported by an expansion of the domestic labour force,” the regulator explained.

While the workforce participation rate in Ireland for 20-64 year olds, of all genders, is currently at its highest level at 74%, this is still below the best performing European countries such as the Netherlands at 84% and Estonia 79%.

The strong employment gains since early 2021, supported primarily by an expansion of the labour force, alongside continued high levels of job vacancies, indicate that the labour market is heading towards full employment, said the Central Bank.

However, the increase in employment may have affected wage dynamics directly, muting wage growth in some sectors for example. As inflation continues, this could have negatively impact employees’ pockets.

The Central Bank said that the negative effects of high employment on wage growth is likely to fall as the available pool of workers shrinks.

In addition, the regulator warned that further staff increases are needed to bring Ireland closer to the best performing countries in Europe but will not happen automatically as Ireland’s employment will “likely require some further action.”