Anthony Foley: Why Ireland's booming labour market is a bright spot for the economy

The number of jobs in Ireland increased from 1.8929 million to 2.5745 million over the past decade. Picture: Damian Coleman

There are many negatives in the Irish economy at present with the poorly performing housing market probably top of the list. But, one very positive feature of the economy, is the performance of the labour market. We are close to full employment, the number of jobs in the economy continues to grow despite recent tech sector job cut announcements and several sectors have labour shortages.

In the final quarter of 2022, the EU unemployment rate was 5.9% compared to Ireland’s 4.1%. However, Ireland was not the best country. Four countries Czechia, Netherlands, Malta and Poland were each below 3%, and another four, Bulgaria, Germany, Hungary and Slovenia were between 3% and 3.9%. Ireland was ranked ninth of the 27 countries. At the other end of the scale, Spain’s unemployment rate was 12.7% and Greece’s was 11.8%. Italy was 7.8% and France 6.8%.

The different features of the labour market and employment can be identified by the CSO’s Labour Force Survey. In the 10 years between 2012 and 2022, the number of jobs in Ireland increased from 1.8929 million to 2.5745 million, an increase of 681.6k or 36%.

The magnitude of the increase over the decade is illustrated by the fact that at the end of 2022, the total employment in Dublin city and county was 775.5k, only 14% larger than the decade’s increase in the total economy. The increase was almost an additional Dublin. Employment has surged since the immediate pre-covid period. In Quarter 4 2019, just before covid, employment was 2.3573 million compared to the current 2.5745 million, an increase of 217.2k or an average of 72.4k jobs per year.

There are 1.2060 million females in employment or 46.8% of the total compared to 1.3685 million males or 53.2%. The female share in 2012 was similar to now at 46.5%. Female employment increased by 36.9% between 2012 and 2022 while male employment grew by 35.2%.

Part-time employment

Part-time employment is predominantly female. Females account for 68.7% of the total part-time employment while males account for 31.3%. The main female reasons for having part-time employment are looking after children or incapacitated adults 29.1%, at school, education or training 20.9%, other family or personal reasons 16.3% and other reasons 19.6%. Only 7.1% were part-time because they could not find full-time employment. For male part-timers, the carer role reason for having part-time work was unsurprising low at 3.5%. The main reason was school, education or training at 33.8%, followed by other reasons at 29.8% and unable to find a full-time job at 12.3%.

Workers from overseas account for 19.1% of the workforce or 490.6k persons. This is measured as citizens of countries other than Ireland. Their contribution to the economy’s labour needs is likely higher because some originally overseas workers would now be Irish citizens.

Which industries or sectors provided the 681.6k new jobs over the past decade? The sectors with the largest absolute employment increases were industry 82.8k, health and welfare 78.4k, construction 78.2k, information and communication 67.3k, education 66.1k, and professional and scientific activities. 61.6k. These six sectors accounted for 64% of the total increase.

Total employment is classified into self-employed with employees (4.0% of the total), self–employed with no employees (8.9%) and employees (86.2%). There is also a small number of relatives assisting (0.9%). The male and female distributions are very different. Self-employment is less prevalent in the female labour force than in the male labour force. Employees are 91.9% of total female workers compared to 81.2% of males. In self-employed with employees, the female share is 1.8% and the share of total male employment is 5.9%. In self-employed with no employees, the female share is 5.3% and the male share is 12.1%.

Unemployment will remain low and employment will continue to grow in the coming years but at a lower rate. As the recent tech sector job reductions show we should not take the labour market positive for granted.

Anthony Foley is associate professor emeritus of economics at Dublin City University Business School