Migration and the Irish Labour Market since EU Enlargement

Brian McCormick

Economist

FAS

Overview

• Brief Literature Overview• Immigration Trends• Profile of EU10 workers• Absorption & Segmentation

Summary of pre-enlargement literature

Lack of research (Ruhs, 2005)

Immigration reduced wages (Barrett et al, 2006)

In 2004, immigrants earning 18% less (Barrett &

McCarthy, 2006)

Immigration main adjustment mechanism

(Honohan & Leddin, 2006)

Gross Migration Flows 1989-2006

0102030405060708090

100

000s

Nationality of non-Irish in employment, 2005-2006

Source: CSO

2005 2007

UK 24.5% 16.6%

Rest of EU 15 14.0% 11.2%

EU 10 31.8% 48.6%

Rest of the World

29.7% 23.6%

To Twenty-five….and then?

How far east?

To Twenty-five….and then?

How far east?

Post-enlargement migration trendPPSN Allocations to EU10

0

2000

4000

6000

8000

10000

12000

14000

16000Peak?

Sectoral Employment Growth by Nationality Since Enlargement

- 40

-20

0

20

40

60

80

000s

Non- Irish

Irish

Total

Labour demand has been strong

020000400006000080000

100000120000140000160000

2002

2003

2004

2005

2006

FAS Vacancies 2003-2006

Work Permit

Non-Work Permit

…..but shortages have been bearable

0

2

4

6

8

10

12

14

Jul-

02

Jan-03

Jul-

03

Jan-04

Jul-

04

Jan-05

Jul-

05

Jan-06

Jul-

06

Jan-07

%

Age Distribution

0%

10%

20%

30%

40%

50%

60%

15-19 20-24 25-34 35-44 45-54 55-59 60-64

EU10

Irish

Educational Profile

0%5%

10%15%20%25%30%35%40%

%EU10

%Irish

Occupational Distribution

0

0.05

0.1

0.15

0.2

0.25

0.3

% EU10

% Irish

EU10 % in 2006 Census Occupations (low rep)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

EU10 % in 2006 Census Occupations (high rep)

0.0%2.0%4.0%6.0%8.0%

10.0%12.0%14.0%16.0%18.0%20.0%

EU10 Earning Less

726

660

557

419

407

0100200300400500600700800

€

Con

stru

ctio

n(u

nsk

illed

)

Ret

ail

Man

ufa

ctu

rin

g

Acc

omod

atio

n&

Cat

erin

g

EU

10

Annual Average Earnings 2005

Occupational DistributionFigure 2.11: Average Weekly Earnings of EU10 Workersin 2005 by Month of Arrival

330340350360370380390400410420430

Minimum Monthly Salary in the EU

0

200

400

600

800

1000

1200

1400

1600

1800

000s

Absorption & Segmentation• Immigration has complemented Irish skills set• Displacement not a major issue

Doyle et al (2006), FAS (2006)• Is segmentation an issue? (low-skill, low-pay)• Risks increase in a slowdown• Minimum wage risk for low-skill occupations

(Fitzgerald et al (2007): • Can & should EU10 migration be influenced?

Thank you!