3.1 General context
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Labour market situation in the country
According to The Economic and Social Research Institute (ESRI) in March 2024, the Irish labour market is performing strongly, and operating close to capacity. The ESRI also predicts that inflation is expected to decline throughout 2024 with a return to growth in real incomes. They expect growth across all main indicators of economic activity in 2024 and 2025. However, the ESRI also warns that the Irish economy will be impacted by global developments.
COVID's effect on the Irish labour market
Due to the COVID-19 pandemic, by May 2020 there was a need for increased State supports, with close to 1.2 million people receiving income supports to the labour market, including those on the Live Register.
To support incomes during the COVID-19 pandemic, the Government introduced the Pandemic Unemployment Payment (PUP) and the Temporary Wage Subsidy Scheme (TWSS) and this was taken over by the Employment Wage Subsidy Scheme (EWSS) in September 2020.
Although Ireland experienced a downturn due to the COVID-19 pandemic, Ireland’s real Gross Domestic Product (GDP) grew by 3% in 2020. This was the only positive growth rate in the EU at the time, boosted by exports from multinational companies (according to the European Commission’s Winter 2020 Economic Forecast).
Over the second half of 2021, Ireland’s economy and labour market have had a sharp recovery from the effects of the Covid pandemic.
Main concepts
There are two prominent features of the Irish labour market. There are a high proportion of people in employment with a third level degree and in Ireland there is a low level of labour market participation for women aged 35 and over without a third level education.
Irish workers are more likely to be employed as ‘professionals’ or in sales and service occupations than their European counterparts. Irish employment is concentrated in the service sector, in both relatively high paying export orientated services, and relatively low paying services more geared to the domestic economy.
Another feature of the Irish economy is that Ireland has become a global technology hub for many companies. Many of the top global software companies, technical companies and IT services companies are based in Ireland. For example, Intel, HP, IBM, Microsoft and Apple, Google, Facebook, LinkedIn, Amazon, PayPal, eBay, and Twitter are all situated in Ireland. A lot of legal, financial and consulting companies are located in Ireland and this increases employment opportunities for Irish people. According to Ireland's Foreign Direct Investment Agency (IDA Ireland), 72% of total national exports in 2020 were from multinationals in Ireland.
IDA Ireland states that Ireland is the second largest exporter of computer and IT services in the world. The sector accounts for more than €50 billion of exports from Ireland per annum.