Elevator pitch
Ireland was hit particularly hard by the global financial crisis, with severe impacts on the labor market. The unemployment rate increased dramatically, and the labor force participation rate declined by four percentage points between 2007 and 2012. Outward migration re-emerged as a safety valve for the Irish economy, helping to moderate impacts on unemployment via a reduction in overall labor supply. As the crisis deepened, long-term unemployment escalated, creating significant policy challenges. Overall unemployment has been dropping rapidly since 2013, but remains above its pre-crisis level.
Key findings
Pros
Unemployment has been on a steep downwards trajectory since 2013.
Migration has acted as an important safety valve for the Irish economy, whereby increases in unemployment have led to rising emigration, thus alleviating the potential impact on the unemployment rate.
Labor force participation rates have stabilized after experiencing substantial falls during the crisis years.
Cons
Long-term unemployment remains a challenge and the share of very long-term unemployed (more than four years) has doubled since the crisis.
Issues around future sources of labor supply are beginning to emerge.
In terms of unemployment, young men (aged 15–24) were hit particularly hard by the recession due to their high concentration within the construction sector.
Due to a lack of comparable earnings data over time, it is not possible to present developments in earnings inequality or the gender pay gap.