Robeert Shiller has a nice little piece on the subject here. (HT: Mark Thoma)
Category: Uncategorized
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.
I’m interested in making sense of the massive gap between exports and imports of royalties and licences.
How do we interpret the high level of imports? Most of which are bought, according to the annual services inquiry, by the computer services industry (74% in 2006) with the rest split largely between R&D companies and wholesale trade companies (c. 10% each)
1. Are the royalties and licences being bought as inputs into production/ innovation? In which case it reflects a continuing dependence on international intellectual property and an ongoing weakness in innovation (particularly given the low level of exports of royalties etc)
2. Are they being bought as a way of repatriating profits? In which case, it may either point to high levels of transfer pricing in the sectors that are importing these royalties and licences, or may reflect improved performance of their international operations by indigenous companies that are then re-patriating profits. if we had data on purchases by sector and nationality of firm we could get some insight into this question, but I haven’t seen that anywhere.
The data do not seem to be publicly available in order to figure out which of the above is at work, and to what degree.
Any tips on additional data or evidence – or interpretations – welcome.
Ronan Lyon’s final post on this thread is available at this link
By necessity, there is a lot of educated guess-work in the post. For example, the working assumption in Ronan’s analysis is that recent layoffs are as likely to be homeowners as not. Nevertheless, the effects of the double-whammy of unemployment and negative equity affecting Dublin’s commuter belt is an issue that Ronan’s post usefully highlights.
TCD are hosting the Infiniti Conference on International Finance on June 8-9. Full details and booking forms are here. More information below the fold.