94% of workers 'better off in work than on dole': ESRI

New research from the ESRI shows that the vast majority of Irish workers are better off in employment.

The think tank has said that 94% of people are better off in work, even after taking account of childcare and travel costs.

Of the remaining 6%, even though they would be “better off on the dole”, most are actually in work, the ESRI said today.

This latest research finds that 86% of those with young children - who face highest childcare costs - are better off in the workplace.

One in seven, or 14%, of people with young children would have a better income on welfare than in employment, because of their receipt of a rent supplement or state support for their mortgage.

Those housing supports have previously been found by the ESRI to undermine the incentive to work.

"(Those schemes), which cover one in eight unemployed people, provide support for housing costs to those out of work, but little or no support to those in work," the ESRI said. The Troika has highlighted the need for action in this area.

The research released today contradicts a separate working paper from the ESRI which was released earlier this year. That paper found that two fifths of families are better off on the dole.

Summarising the findings of the latest research, the ESRI's Professor Tim Callan said: "Overall, we find that the unemployed face similar work incentives here to elsewhere in the EU. The very large majority are better off in work not out of work."

The findings released today come after the IMF raised concerns about high welfare rates in Ireland, leading to concern that rates could be cut in December's Budget.

[comment]See p.49 in the document below for 'Work Incentives: New Evidence for Ireland'[/comment]