www.oecd.org/eco/surveys/economic-survey-ireland.htm

OECDOECD Economics

2015 OECD ECONOMIC SURVEY OF IRELAND

More inclusive and productive15 September 2015

2

How is life in Ireland?Generally good.

Source: OECD Better Life Index 2015

Income and wealth

Jobs and earnings

Housing

Work and life balance

Health status

Education and skillsSocial connections

Civic engagement and governance

Environmental quality

Personal security

Subjective well-being

0

5

10

Ireland OECD

3

Household income inequality is below the OECD average

Source: OECD Income Distribution Database

Ireland’s comprehensive welfare system protected vulnerable groups during the crisis and underpinned the social cohesion needed to make reforms possible

DNK

CZE

FIN

SVN ISL

SVK

BEL

NOR

SWE

DEU

CHE

NLD

AUT

LUX

HUN

POL

FRA

IRL

NZL

CAN

AUS

OECD ES

TPR

TGB

RKO

RJP

NIT

AES

PGR

CIS

RTU

RUS

AM

EX

0

5

10

15

20

25

30

0

5

10

15

20

25

30ratio ratio

Ratio of incomes of the top 10% vs. bottom 10%, 2012

Note: Incomes after tax and transfers

4

Impressive reforms in recent years

Source: OECD and Irish Statute Book

Reform Main Legislation Enacted New or empowered regulator Remaining steps to be taken

Fiscal December 2012 Yes …

Financial and Banking Oct 2010 and August 2013 Yes …

Personal Insolvency December 2013 Yes …

Competition July 2014 Yes …

Corporate Governance December 2014 No

Water March 2013 Yes Complete the roll-out of household water meters

Labour Market Activation No legislation. Pathways to Work Reforms start February 2012 Yes Full roll-out of contracting out of job-

search services

Further Education and Training October 2013 Yes Design and implement new

apprenticeships and vocational training.

Government Accountability & Transparency July 2013, July and October 2014 Yes

Health (Pharmaceuticals pricing) May 2013 Yes

5

Strong real GDP growth has returned

Source: OECD Economic Outlook 97 Database, projections revised as of 10 September 2015.

Y-o-Y % growth Billion EUR

-6

-4

-2

0

2

4

6

8

10

12

40

60

80

100

120

140

160

180

200

220GDP growth (lhs) Real GDP (rhs)

GDP Growth2014 5.2%2015 5%2016 4%

6

130 thousand new jobs since early-2012 have reduced unemployment

Source: Central Statistics Office

Jan-05

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

0

2

4

6

8

10

12

14

16

0

2

4

6

8

10

12

14

16% %

Seasonally adjusted monthly unemployment rate

Monthly unemployment rate 9.5%, August 2015

7

The budget deficit is falling

Source: OECD, National Accounts and OECD Economic Outlook 97 Database, projections revised as of 10 September 2015

Bank recapitalisation

General government deficit

2008 2009 2010 2011 2012 2013 2014 2015 2016-35

-30

-25

-20

-15

-10

-5

0

-35

-30

-25

-20

-15

-10

-5

0

% of GDP % of GDP

8

Public debt should be reduced

Source: Economic Outlook Database No. 97; OECD Calculations

Note: All scenarios use the projections in the Economic Outlook Database No. 97 for the years 2015 and 2016, revised as of 10 September 2015.

General government gross debt, debt simulation analysis

0

20

40

60

80

100

120

140

0

20

40

60

80

100

120

140

GDP growth 1.8%; balanced budgetGDP growth 1.8%, fiscal balance -2.8% of GDPGDP growth 0%, balanced budget

% of GDP % of GDP

9

Household debts make Ireland more vulnerable to international shocks

Source: OECD, Financial Indicators Database.

Household debt, 2013 or latest available

HUNSVN

SVKPOL

CZE ITAEST

AUTDEU

FRABEL

GRCUSA FIN JP

NESP

OECDPRT

GBRKOR

CANSWE

AUSCHE

NOR IRLNLD

0

50

100

150

200

250

300

0

50

100

150

200

250

300% of disposable income % of disposable income

10

Non-performing loans are still high

Source: IMF Financial Soundness Indicators and Central Bank of Ireland

The legal system is slow to resolve non-performing loans

Note: The definition of non-performing loans is not entirely standardised across countries. Many, including Ireland, are loans overdue for more than 90 days.

Non-performing loans, 2014Q4 or latest available

CAN

SWE

KOR

AUS

NOR

JPN

USA

GBR

TUR

MEX NLD

AUT

BEL

DNK

FRA

POL

SVK

CZE

ESP

PRT

SVN

HUN

ITA

IRL

GRC

0

5

10

15

20

25

30

35

0

5

10

15

20

25

30

35 % of total loans % of total loans

11

Property prices are rising again

Source: OECD, Economic Outlook Database

Take further supervisory measures as needed

Real housing prices

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 201475

100

125

150

175

200

75

100

125

150

175

200Denmark Netherlands United Kingdom

Ireland

Index 2000=100 Index 2000=100

Making growth more inclusive

13

The tax and transfer system reduces inequality by more than any other country in the OECD

Note: 2012, for Canada 2011, GINI coefficient before and after taxes and transfers

Source: OECD Income Distribution Database

DNK

SVK

SVN

NOR

CZE

ISL

FIN

BEL

SWE

AUT

NLD

CHE

HUN

DEU

POL

LUX

IRL

FRA

KOR

OEC

D

CAN

AUS

ITA

NZL

ESP

EST

PRT

GRC

GBR

ISR

USA

TUR

MEX

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7Gini before taxes and transfers Gini after taxes and transfers

14

Ireland’s relative poverty rate remains low

Source: OECD Income Distribution database.

Poverty rate after tax and transfers, 2012

Note: Percentage of the population with income below 60% of the median, latest comparable information

CZE

ISL

DNK

SVK

FIN

NLD

NOR

DEU

FRA

AUT

IRL

SVN

CHE

LUX

HUN

POL

SWE

GBR

OECD BE

LCA

NIT

ANZ

LPR

TKO

RES

TAU

SES

PGR

CJP

NUS

ACH

LIS

RM

EXTU

R

0

5

10

15

20

25

30

0

5

10

15

20

25

30% of total population % of total population

15

The gender wage gap is low

Source: OECD Employment and Labour Market Statistics

NZL

BEL

LUX

GRC

NOR

DNK

ESP

HUN

POL

ITA

SVN

IRL

FRA

ISL

SVK

SWE

MEX

OECD CZ

ECH

LPR

TDE

UGB

RUS

AAU

SAU

TCH

EFI

NCA

NTU

RNL

DIS

RJP

NES

T

0

5

10

15

20

25

30

35

0

5

10

15

20

25

30

35

40% of male median wage % of male median wage

Note: 2013 or latest available. The gender wage gap is unadjusted and is defined as the difference between median earnings of men and women relative to median earnings of men. Data refer to full-time employees.

16

60% of jobseekers have been unemployed more than 12 months, with the risk of scarring effects

Source: OECD calculations based on quarterly national labour force surveys

Note: Countries are shown in ascending order of the share of long-term unemployment in total unemployment in Q4 2014.a) Data are not seasonally adjusted but smoothed using three-quarter moving averages. OECD

is the weighted average of 33 OECD countries excluding Chile.

b) 2013 for Israel.

%

Long term unemployment, % of total unemployed

KOR

MEX NZ

LIS

R ISL

CAN

TUR

SWE

AUS

USA

DNK

FIN

LUX

AUT

NOR

GBR G7

OEC

DCH

EJP

NPO

LFR

ANL

DES

TDE

UHU

NCZ

EEu

rope

an U

nion

BEL

Euro

are

aES

PSV

NIR

LPR

TIT

ASV

KGR

C

0

10

20

30

40

50

60

70

80

0

10

20

30

40

50

60

70

80

% %

17

Many low income families with children face strong disincentives to work

Source: OECD Taxing Wages (database).

Marginal effective tax rate 67% of the average wage, single, two children, percent (2014)

Reduce housing and welfare assistance payments more gradually as in-work income increases, so as not to discourage work

CHL

KOR

MEX IS

RCH

EPO

LJP

NSV

NDN

KNZ

LES

TNO

RTU

ROE

CDSW

ESV

KCZ

EGR

CHU

NLU

XUS

ANL

DPR

TIS

LES

PDE

UFI

NIT

AAU

TFR

AAU

SCA

NBE

LIR

LGB

R

0

10

20

30

40

50

60

70

80

0

10

20

30

40

50

60

70

80

% %

18

Childcare is expensive

Source: OECD, Tax-Benefit Models; www.oecd.org/els/social/workincentives.

Improve access and affordability of quality childcare, particularly for low income families

1. EU and OECD averages exclude Chile, Italy, Mexico and Turkey.

Lone parent, net cost, as percentage of average wage, 2012

KOR

LUX

SWE

DEU

AUT

ISL

GBR

POL

ESP

NLD

OECD

¹

SVN

JPN

ISR

CAN

USA

0

5

10

15

20

25

30

35

40

45

0

5

10

15

20

25

30

35

40

45% of average wage % of average wage

Getting the most out of migration

20

Migration is turning around

Source: CSO up to 2014. Projections for 2015 and 2016, based on equations described in the OECD Economic Survey of Ireland 2015 and unemployment rates as projected in OECD Economic Outlook.

• Promote greater participation from immigrants in employer provided training

• Provide English language support to students with foreign language backgrounds

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

-60

-40

-20

0

20

40

60

80

100

120

-60

-40

-20

0

20

40

60

80

100

120Immigrants minus emigrants

Thousand persons Thousand persons

21

“Brains exchange”More than half of migrants are tertiary qualified

Source: Central Statistics Office (CSO)

Encourage and facilitate SMEs using trust-based work permit schemes so they can access foreign talent

Education attainment, 2014

Emigrants Immigrants0

10

20

30

40

50

60

70

80

0

10

20

30

40

50

60

70

80

Tertiary Secondary

Thousand persons Thousand persons

Raising productivity

23

Productivity growth has slowed

Source: OECD Economic Outlook database.

• Intensify competition in legal, port and electricity services

• Expand the National Competitiveness Council into a Productivity Commission

Total factor productivity growth

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-1

-0.5

0

0.5

1

1.5

2

2.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5Ireland United-Kingdom Netherlands United-States

% %

24

Government support for R&D is modest

Source: OECD (2014),OECD Science, Technology and R&D Statistics (database), July and OECD Science, Technology and Industry Scoreboard 2013.

• Steadily expand research student placements in firms • Ensure Enterprise Ireland’s Technology centres are

demand driven • Focus Technology centres on improving product quality

and production processes

CHL

MEX

HUN

POL

GRC

SVK

AUS

IRL

NZL

ISR

SVN

CAN

ITA

GBR

ESP

LUX

BEL

OECD CZ

E

FRA

NLD

JPN

NOR

AUT

CHE

EST

SWE

USA

DEU

PRT

DNK

ISL

KOR

FIN

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

1.1% of GDP% of GDP

25

Government innovation support to business is skewed towards R&D Tax credits

Source: OECD (2014),OECD Science, Technology and R&D Statistics (database), July and OECD Science, Technology and Industry Scoreboard 2013.

Rebalance innovation supports towards direct grants

Government support for business innovation

MEX CH

L

POL

CHE

SVK

LUX

ITA

TUR

NZL

FIN

DEU

JPN

DNK

EST

PRT

SWE

AUS

NOR

OECD ES

P

GBR

NLD

IRL

HUN

CZE

AUT

CAN

BEL

USA

SVN

FRA

KOR

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40R&D grants R&D tax incentives

% of GDP% of GDP

More Information…

www.oecd.org/eco/surveys/economic-survey-ireland.htm

OECDOECD Economics

Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

26