Author: Aedín Doris

The Labour Economics Group at NUI Maynooth is hosting a one-day conference on Labour Markets During Crises on Wednesday, July 2 in Maynooth.

Olive Sweetman will be presenting our ongoing work on how the crisis has affected the Irish labour market, and we’ve got a great line-up of external speakers too: Torben Andersen from the University of Aarhus, Pedro Martins from Queen Mary College, University of London, Mike Elsby from the University of Edinburgh and Ignacio Garcia Perez from Seville’s Universidade Pablo de Olavide. Full details are available here.

As it says on the flyer, registration is free, but you should email me if you plan to attend.

Donal O’Neill, Olive Sweetman and I have been working on the issue of wage flexibility in Ireland, and have put our initial results into a working paper. Here’s the abstract:

There is considerable debate about the role of wage rigidity in explaining unemployment. Despite a large body of empirical work, no consensus has emerged on the extent of wage rigidity. Previous attempts to empirically examine wage rigidity have been hampered by small samples and measurement error. In this paper we examine nominal wage flexibility in Ireland both in the build up to, and during the Great Recession. The Irish case is particularly interesting because it has been one of the countries most affected by the crisis. Our main analysis is based on earnings data for the entire population of workers in Ireland taken from tax returns, which are free of reporting error. We find a substantial degree of downward wage flexibility in the pre-crisis period. We also observe a significant change in wage dynamics since the crisis began; the proportion of workers receiving wage cuts more than doubled and the proportion receiving wage freezes increased substantially. However, there is considerable heterogeneity in wage changes, with a significant proportion of workers continuing to receive pay rises at the same time as other were receiving pay cuts.

The full paper is linked here.

Edit on December 17: link changed to working link

(This is a joint post with Donal O’Neill (NUIM) and Frank Walsh (UCD))

Because of the media storm last week about the Tol et al. paper on working costs, myself and a few colleagues (separately) decided to read the paper to see what all the fuss was about. We are all labour economists, used to using data on individuals, households and firms to address questions relevant to public policy issues. Our assessment of the paper is below.

The basic approach of the paper is as follows: it uses Household Budget Survey (HBS) data to examine the consumption patterns of different types of households. HBS data is collected at the household, rather than the individual level so the analysis distinguishes between households whose chief earner is employed and those whose chief earner is not employed. In particular, it examines the consumption patterns of these two household types under four headings: transport, childcare, heat & light, and takeaway food. To the extent that the amount spent by these households differ, the difference is designated a cost of working.