Category: Economic Performance

The IFS have recently published a report on inequality in the UK (http://www.ifs.org.uk/publications/4524).  They show inequality at its highest level since a consistent time-series began in 1961.  Unfortunately the data has not picked up all of the recent declines in income but they speculate that incomes at the top (more heavily dependent upon interest and dividends and with a higher proportion of earners in the financial sector) may have experienced a greater fall.  It is interesting to carry out similar speculation for Ireland.  Certainly the same forces are at work at the top of the income distribution but we have also experienced a greater rise in unemployment.  However the recent ESRI analysis by Tim Callan and his colleagues has shown that the lowest quintile has done relatively well in recent budgets, particularly last year.  On balance this suggests a fall in inequality. The relative position of pensioners is of particular interest, with their reliance on interest and dividends (which have fallen) and on the old-age pension, which has risen in real terms in recent years.  No doubt Brian Nolan’s paper at Wednesday’s Conference in TCD will throw further light upon this.