The potential costs and distributional effect of COVID-19 related unemployment in Ireland

Abstract

The mission of the Economic and Social Research Institute is to advance evidencebased policymaking that supports economic sustainability and social progress in Ireland. ESRI researchers apply the highest standards of academic excellence to challenges facing policymakers, focusing on 12 areas of critical importance to 21st Century Ireland.The Institute was founded in 1960 by a group of senior civil servants led by Dr T. K. Whitaker, who identified the need for independent and in-depth research analysis to provide a robust evidence base for policymaking in Ireland.Since then, the Institute has remained committed to independent research and its work is free of any expressed ideology or political position. The Institute publishes all research reaching the appropriate academic standard, irrespective of its findings or who funds the research.The quality of its research output is guaranteed by a rigorous peer review process. ESRI researchers are experts in their fields and are committed to producing work that meets the highest academic standards and practices.The work of the Institute is disseminated widely in books, journal articles and reports. ESRI publications are available to download, free of charge, from its website. Additionally, ESRI staff communicate research findings at regular conferences and seminars.The ESRI is a company limited by guarantee, answerable to its members and governed by a Council, comprising 14 members who represent a cross-section of ESRI members from academia, civil services, state agencies, businesses and civil society. The Institute receives an annual grant-in-aid from the Department of Public Expenditure and Reform to support the scientific and public interest elements of the Institute's activities; the grant accounted for an average of 30 per cent of the Institute's income over the lifetime of the last Research Strategy. The remaining funding comes from research programmes supported by government departments and agencies, public bodies and competitive research programmes.

Child poverty in Ireland and the pandemic recession

“…While child income poverty rates increase substantially in Scenario A and only moderately in Scenario B, this does not necessarily mean that the same children are living in income poverty in all scenarios. The rising social safety net brought about through emergency income-support measures has left some households who have faced an employment loss financially better off in the short-term (Beirne et al, 2020). Redmond (2020) also notes that the €350 PUP payment is 50 per cent higher than the gross weekly wage of the average minimum-wage employee in the retail and accommodation & food sectors.…”

“…Overall, it appears that, in both Scenario A and B, income losses in previously nonpoor households tend to move a significant portion of children (as high as 6.3 per cent in A and 3.0 per cent in B) below the baseline income poverty threshold. Despite income gains being evident for some households after accounting for employment losses and emergency income supports as outlined in Beirne et al (2020), these income gains are neither large enough, nor pervasive enough, to lift many previously poor children out of income poverty. We examine the household income changes underlying these income poverty transitions in Table 3, where we tabulate the income changes faced by households moving above and below the income poverty line in Scenarios A and B.…”

“…The series reported an unemployment rate of 28 per cent in April 2020. 1 Beirne et al (2020) show that employment losses from COVID-19 heavily reduced household incomes; one can assume that this will have knockon effects on living standards and the risk of exposure to financial difficulties with arrears and debts.…”

Assessing the impacts of COVID-19 on the Irish property market: An overview of the issues

“…Kelly and McQuinn (2014), for example, observe a very close relationship between house prices and developments in the Irish labour market. However, as shown in Beirne et al (2020) the immediate impact on incomes during this crisis has been largely offset by the introduction of extraordinary fiscal measures in the form of the Pandemic Unemployment Payment (PUP) and the Temporary COVID-19 Wage Subsidy Scheme (TWSS). As a result, the direct impact of the labour market shock on housing demand may be muted in the short term.…”

The environmental and economic impacts of the COVID-19 crisis on the Irish economy: An application of the I3E model

“…In order to alleviate the negative consequences of the economic slowdown triggered by the virus crisis, the Irish government announced an economic package consisting of weekly payments of C410 ( C350) to those employees (self-employed) who lost their jobs (closed down their businesses). The cost of the crisis on the Irish exchequer, including the loss in wage income tax revenue, is expected to vary between C4 and C4.9 billion based on the level of the decline in employment (Beirne et al, 2020, Table 1). The authors also find that for every 100,000 jobs lost in Ireland, the government will face an increase in welfare spending by around C800 million per quarter.…”