Friday, August 16, 2013

Irish Unemployment Decline Isn't A "Mirage"

Kenneth Thomas asserts that the decline in unemployment in Ireland from a high of 15.1% in February 2012 to 13.6% in June 2013 ( 13.5% in July) is a "mirage based on emigration". There are several problems with this assertions. First is that there's nothing wrong with unemployed workers emigrating from high unemployment areas, that's one of the ways by which labor market balance can be achieved.

Second, he uses numbers in a misleading way by counting emigration before unemployment peak. Since we're supposed to analyze the decline, that is misleading.

And thirdly, if the premise is it is a problem that emigration of workers still leaves the problem of a lower tax base of employed workers, he forgets to note that Ireland has a very high (by Western standards) natural population growth rate which more than compensates for emigration. Ireland's population is in fact growing, albeit slowly.

While Ireland's unemployment numbers are published on a monthly basis, its employment numbers are only available on a quarterly basis and second quarter numbers aren't available yet. But between Q1 2012 and Q1 2013 employment rose by 1.1%.


Blogger Shane Leavy said...

Just to back that up, the latest Quarterly National Household Survey (for Q2) has shown that employment - both full and part time - has continued to increase in the second quarter:

So certainly the fall in unemployment can't be explained only by emigration. The number of people working in Ireland is rising.

4:47 PM  

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