As readers will be well aware, the Irish unemployment has soared since the end of 2007. Most of the short-run commentary focuses on the monthly Live Register (LR) figures, which we know contain many landmines of interpretation. The Quarterly National Household Survey (QNHS) data are based on more economically meaningful (ILO) definitions, but these too need to be handled with care. (For example, anyone working for pay or profit for one hour a week or more is classified as employed.)
The survey data allow us to look at the employment rate – that is, the proportion of the adult population in employment – and this is probably more meaningful as a current economic indicator than the unemployment rate. (The employment rate is the product of the labour force participation rate and (one minus) the unemployment rate.)
A look back at the employment rate over the past twelve years is interesting. The male employment rate has fallen by five percentage points – from 70.5% to 65.5% – since the third quarter of 2007. (N.B. These figures are not seasonally adjusted, but I do show the four-quarter moving average.)
This brings it back to where it was in the late 1990s. The female employment rate dropped by only two percentage points – from 52.7% to 50.7% – over the same period. This leaves it where it was in 2006. The overall rate fell by three and a half percentage points, from 61.5% to 58.0%, so it is back to here it was in 2004. Female participation held up well in 2008, but male unemployment has risen, and participation fallen, faster.
The continuing relatively high participation rates is one hopeful sign in an otherwise gloomy landscape. The forthcoming QNHS for the first quarter of 2009 will probably show further rises in unemployment and falls in participation, but perhaps later this year there will be signs of stabilisation.