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Structural Reforms to Reduce Unemployment and Restore Competitiveness in Ireland

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  • Álvaro Pina

Abstract

After a recession of historic proportions, an export-led recovery is gaining traction in Ireland. The pace of recovery, however, varies sharply across sectors. While export-oriented manufacturing and services, led by large multinationals, have reached record-high levels of output, inward-oriented sectors, where Irish-owned SMEs predominate, are by and large still struggling to emerge from the crisis. Reflecting the weakness of this traditional sector, which is labour intensive, unemployment rates remain very high, particularly among young men with low or intermediate qualifications, often formerly employed in the construction sector. To tackle high and persistent unemployment and thus stave off social exclusion, Ireland needs to further pursue an integrated three-pillar strategy: welfare reform to ensure that work pays; better activation policies to assist labour reallocation across sectors; and a sustained restraint in wages and other business costs to restore international competitiveness. In particular, often building on recent policy initiatives or commitments, this paper recommends reforms to further enhance product-market competition, improve innovation efforts and ameliorate the quality of education, which are key to economic prosperity. This Working Paper relates to the 2011 OECD Economic Survey of Ireland (www.oecd.org/eco/surveys/ireland). Des réformes structurelles pour lutter contre le chômage et rétablir la compétitivité en Irlande Après une récession d’une exceptionnelle gravité, l’économie irlandaise connaît une reprise tirée par les exportations. Néanmoins, le rythme de cette reprise est très variable d’un secteur à l’autre. Alors que l’industrie manufacturière et les services tournés vers l’exportation, dominés par de grandes entreprises multinationales, ont atteint des niveaux de production record, les secteurs axés sur le marché intérieur, où les PME irlandaises prédominent, peinent toujours à sortir de la crise. Compte tenu de la faiblesse de ce secteur traditionnel à forte intensité de main-d’oeuvre, les taux de chômage restent très élevés, notamment parmi les hommes jeunes peu ou moyennement qualifiés, qui travaillaient souvent dans le secteur de la construction. Pour s’attaquer à un chômage élevé et persistant et conjurer ainsi les risques d’exclusion sociale, l’Irlande doit poursuivre une stratégie intégrée fondée sur trois piliers : une réforme du système de protection sociale de nature à valoriser le travail ; de meilleures politiques d’activation pour faciliter un redéploiement de la main-d’oeuvre entre les secteurs ; et une compression persévérante des salaires et d’autres dépenses d’exploitation afin de redevenir compétitive sur le plan international. En particulier, en s'appuyant souvent sur des récentes initiatives ou engagements politiques, cet étude préconise des réformes destinées à accroître la compétitivité sur les marchés de produits, à stimuler l’innovation et à améliorer la qualité de l’enseignement, conditions indispensables à la prospérité économique. Ce Document de travail se rapporte à l'Etude économique de l'OCDE de l’Irlande 2011 (www.oecd.org/eco/etudes/irlande).

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 910.

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Date of creation: 02 Dec 2011
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Handle: RePEc:oec:ecoaaa:910-en

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Keywords: international trade; unemployment; education; competition; electricity; labour costs; technology transfer; R&D; Ireland; competitiveness; activation policies; welfare system; constant market share analysis; politiques d'activation; R-D; compétitivité; coûts salariaux; Irlande; transfert de technologie; système de prestations sociales; analyse des parts de marché; éducation; concurrence; électricité; commerce international; chômage;

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Cited by:
  1. repec:esr:chaptr:jacb201240 is not listed on IDEAS
  2. Callan, Tim, 2012. "Budget Perspectives 2013," Research Series, Economic and Social Research Institute (ESRI), number RS28.
  3. repec:esr:chaptr:jacb201239 is not listed on IDEAS
  4. Callan, Tim & Keane, Claire & Savage, Michael & Walsh, John R. & Timoney, Kevin, 2012. "Work Incentives: New Evidence for Ireland," Papers BP2013/3, Economic and Social Research Institute (ESRI).
  5. FitzGerald, John, 2012. "Fiscal Policy for 2013 and Beyond," Papers BP2013/1, Economic and Social Research Institute (ESRI).

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