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Convergence of Living Standards Among Irish Regions: The Roles of Productivity, Profit Outflows and Demography, 1960-1996


  • Eoin O'Leary


Using a consistent data set, this paper presents evidence, for the first time, on the degree of convergence of living standards among Irish planning regions between 1960 and 1996. The basic decomposition of living standards into productivity and demographic factors is extended to include the income/output ratio, which is significant in Ireland due to the presence of substantial profit outflows since the mid-1980s. Living standards converged strongly among regions between 1960 and 1979, but between 1979 and 1996 there was weak divergence. The chief proximate cause of this reversal was the slowdown in the effect of productivity on the degree of convergence of living standards. The emergence of profit outflows exerted a negative effect on living standards growth, while the Irish 'demographic dividend' boosted growth but had a divergent effect on living standards growth during the 1980s and 1990s. A renewed future role for regional policy focused on the major urban centres is proposed A partir d'un ensemble de donnees ordonnees, cet article cherche a presenter pour la premiere fois des preuves qui demontrent la convergence des niveaux de vie dans les zones d'etude et d'amenagement du territoire d'Irlande entre 1960 et 1996. La repartition fondamentale des niveaux de vie en facteurs de productivite et demographiques se voit etendre pour inclure le rapport revenu/rendement, qui s'avere important en Irlande a cause des sorties de profit non-negligeables depuis le milieu des annees 1980. Entre 1960 et 1979 les niveaux de vie dans les regions ont fortement converge, en revanche ils se sont creuses legerement entre 1979 et 1996. Ce renversement de tendance s'explique principalement par le ralentissement de l'impact de la productivite sur la convergence des niveaux de vie. L'apparition des sorties de profit a eu un impact negatif sur l'amelioration des niveaux de vie, tandis que les 'dividendes demographiques' irlandais ont donne du tonus a la croissance alors qu'ils ont eu un impact divergent sur l'amelioration des niveaux de vie dans les annees 1980 et 1990. On propose que la politique regionale prend un role futur qui porte sur les grands centres urbains Mit Hilfe einer durchweg bestandigen Datenreihe stellt dieser Aufsatz erstmalig Beweise fur das Ausmass der Konvergenz von Lebensstandarden in irischen Planungsregionen im Zeitraum 1960-1996 vor. Die grundlegende Zerlegung des Lebensstandards in Leistungs- und demographische Faktoren wird auf das Verhaltnis von Aufwand und Ertrag ausgedehnt, welches in Irland wegen des Vorkommens betrachtlichen Abfliessens von Gewinn seit Mitte der achtziger Jahre bedeutsam ist. Die Lebensstandarde naherten sich in den Regionen im Zeitraum 1960-1979 stark an einander an, doch in den Jahren 1979-1996 liess diese Annaherung stark nach. Der unmittelbare Hauptgrund dieser Wende war ein Nachlassen der Auswirkung auf das Ausmass der Konvergenz der Lebensstandarde. Als Gewinn begann, abzufliessen, wirkte sich dies negativ auf den Anstieg des Lebensstandards aus, wahrend die irische ''demographische Dividende'' zwar dem Wachstum Auftrieb gab, sich jedoch auf die Zunahme der Lebensstandarde in den achtiger und neunziger Jahren divergierend auswirkte. Es wird vorgeschlagen, dass eine erneue, zukunftige Rolle fur die Regionalpolitik in der Hinwendung auf bedeutende stadtische Zentren liegen konnte.

Suggested Citation

  • Eoin O'Leary, 2001. "Convergence of Living Standards Among Irish Regions: The Roles of Productivity, Profit Outflows and Demography, 1960-1996," Regional Studies, Taylor & Francis Journals, vol. 35(3), pages 197-205.
  • Handle: RePEc:taf:regstd:v:35:y:2001:i:3:p:197-205
    DOI: 10.1080/00343400123670

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    References listed on IDEAS

    1. Gerard Caprio & Patrick Honohan, 2008. "Banking Crises," Center for Development Economics 2008-09, Department of Economics, Williams College.
    2. Sala-i-Martin, Xavier X, 1996. "The Classical Approach to Convergence Analysis," Economic Journal, Royal Economic Society, vol. 106(437), pages 1019-1036, July.
    3. Ross, Miceal, 1972. "Further Data on County Incomes in the Sixties," Research Series, Economic and Social Research Institute (ESRI), number GRS64.
    4. Costas Siriopoulos & Dimitrios Asteriou, 1998. "Testing for Convergence Across the Greek Regions," Regional Studies, Taylor & Francis Journals, vol. 32(6), pages 537-546, August.
    5. Gerry Boyle & Tom McCarthy & Jim Walsh, 1999. "Regional Income Differentials and the Issue of Regional Equalisation in Ireland," Economics, Finance and Accounting Department Working Paper Series n880499, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
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    Cited by:

    1. Michael Beenstock & Daniel Felsenstein, 2007. "Mobility and Mean Reversion in the Dynamics of Regional Inequality," International Regional Science Review, , vol. 30(4), pages 335-361, October.


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