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Changing Returns to Education During a Boom? The Case of Ireland

Author

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  • Seamus McGuinness
  • Frances McGinnity
  • Philip J. O'Connell

Abstract

Ireland experienced dramatic growth in the economy and employment in the second half of the 1990s. This paper examines the consequences of that boom for returns to education and wage inequality using data from the Living in Ireland Survey for the years 1994, 1997, and 2001. Rapid economic growth is often expected to lead to increased returns to education and thus to rising wage inequality. We find fairly stable returns to education and falling wage inequality for men throughout the period, partly due to strong demand for unskilled labour, which helped maintain low‐skilled wages. For women the wage premium for a university degree fell between 1997 and 2001, as did wage inequality. We argue that for women, low‐skilled wages may have been kept up by the introduction of the minimum wage in 2000, and high‐skilled wages fell due to a rapid rise in the supply of highly qualified women.

Suggested Citation

  • Seamus McGuinness & Frances McGinnity & Philip J. O'Connell, 2009. "Changing Returns to Education During a Boom? The Case of Ireland," LABOUR, CEIS, vol. 23(s1), pages 197-221, March.
    • Handle: RePEc:bla:labour:v:23:y:2009:i:s1:p:197-221
    DOI: 10.1111/j.1467-9914.2008.00437.x
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    1. Aysit Tansel & Fatma Bircan Bodur, 2012. "Wage Inequality and Returns to Education in Turkey: A Quantile Regression Analysis," Review of Development Economics, Wiley Blackwell, vol. 16(1), pages 107-121, February.
    2. Biagetti, Marco & Scicchitano, Sergio, 2009. "Wage inequality and returns to schooling in Europe: a semi-parametric approach using EU-SILC data," MPRA Paper 19060, University Library of Munich, Germany.
    3. Brian Nolan, 2010. "Ireland: A Successful Minimum Wage Implementation?," Chapters, in: Daniel Vaughan-Whitehead (ed.), The Minimum Wage Revisited in the Enlarged EU, chapter 9, Edward Elgar Publishing.
    4. repec:esr:wpaper:bp2016/2 is not listed on IDEAS
    5. Smyth, Emer & McCoy, Selina, 2009. "Investing in Education: Combating Educational Disadvantage," Research Series, Economic and Social Research Institute (ESRI), number RS6.
    6. Emily C Murphy & Daniel Oesch, 2018. "Is Employment Polarisation Inevitable? Occupational Change in Ireland and Switzerland, 1970–2010," Work, Employment & Society, British Sociological Association, vol. 32(6), pages 1099-1117, December.
    7. Alan Barrett & Adele Bergin, 2009. "Estimating the Impact of Immigration in Ireland," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 35, pages 1-2.
    8. Ezgi Kaya, 2023. "Gender wage gap trends in Europe: The role of occupational skill prices," International Labour Review, International Labour Organization, vol. 162(3), pages 385-405, September.
    9. Sarah Voitchovsky & Bertrand Maitre & Brian Nolan, 2012. "Wage Inequality in Ireland’s “Celtic Tiger” Boom," The Economic and Social Review, Economic and Social Studies, vol. 43(1), pages 99-133.
    10. Bercholz, Maxime & FitzGerald, John, 2016. "Recent Trends in Female Labour Force Participation in Ireland," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).
    11. repec:esr:resser:rs006 is not listed on IDEAS
    12. Niamh Hardiman & Patrick Murphy & Orlaith Burke, 2008. "Legitimating Fiscal Stabilization: Ireland in Comparative Perspective," Working Papers 200813, Geary Institute, University College Dublin.
    13. DAVIA, Maria A. & McGUINNESS, Seamus & O’CONNELL, Philip J., 2014. "Exploring The Role Of Labour Market Uncertainty In Explaining Differences In Rates Of Return To Education In Europe," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 14(3), pages 89-104.
    14. Kelly, Elish & McGuinness, Seamus & Walsh, John R., 2015. "An Evaluation of the Back to Education Allowance," Research Series, Economic and Social Research Institute (ESRI), number RS47.
    15. McGuinness, Seamus & Kelly, Elish & Pham Thi Thu, Phuong & Ha Thi Thu, Thuy, 2015. "Returns to Education and the Demand for Labour in Vietnam," Papers WP506, Economic and Social Research Institute (ESRI).
    16. Józef Dziechciarz, 2015. "Measurement of Rate of Return in Education. Research Directions," Proceedings of FIKUSZ 2015, in: Jolán Velencei (ed.),Proceedings of FIKUSZ '15, pages 39-56, Óbuda University, Keleti Faculty of Business and Management.
    17. Chen, Yanan & Kelly, Kyle A., 2019. "The gender difference in wages and the returns to schooling over the great recession in the U.S," Research in Economics, Elsevier, vol. 73(2), pages 190-198.
    18. Brian Nolan & Bertrand Maitre & Sarah Voitchovsky & Christopher Whelan, 2012. "GINI DP 70: Inequality and Poverty in Boom and Bust: Ireland as a Case Study," GINI Discussion Papers 70, AIAS, Amsterdam Institute for Advanced Labour Studies.
    19. McGuinness, Seamus & Kelly, Elish & O'Connell, Philip J., 2008. "The Impact of Wage Bargaining Regime on Firm-Level Competitiveness and Wage Inequality: The Case of Ireland," Papers WP266, Economic and Social Research Institute (ESRI).
    20. Darragh Flannery & Cathal O'Donoghue, 2012. "Utilising microsimulation to estimate new marginal returns to education: Ireland 1987-2011," Working Papers WP042012, University of Limerick, Department of Economics, revised Oct 2012.
    21. McGuinness, Seamus & Kelly, Elish & Pham, Thi Thu Phuong & Ha, Thi Thu Thuy & Whelan, Adele, 2021. "Returns to education in Vietnam: A changing landscape," World Development, Elsevier, vol. 138(C).
    22. Rafal Kierzenkowski & Isabell Koske, 2012. "Less Income Inequality and More Growth – Are they Compatible? Part 8. The Drivers of Labour Income Inequality – A Literature Review," OECD Economics Department Working Papers 931, OECD Publishing.
    23. Darragh Flannery & Cathal O'Donoghue, 2016. "Utilizing Microsimulation to Estimate the Private and Fiscal Returns to Education: Ireland 1987–2011," Manchester School, University of Manchester, vol. 84(1), pages 55-80, January.
    24. Watson, Dorothy & Lunn, Pete & Quinn, Emma & Russell, Helen, 2012. "Multiple Disadvantage in Ireland: An Equality Analysis of Census 2006," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT213.
    25. David Byrne & David Duffy & John FitzGerald, 2018. "Household Formation and Tenure Choice: Did the Great Irish Housing Bust Alter Consumer Behaviour?," The Economic and Social Review, Economic and Social Studies, vol. 49(3), pages 287-317.

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