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Understanding Irish Labour Force Participation

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  • Byrne, Stephen

    (Central Bank of Ireland)

  • O'Brien, Martin

    (Central Bank of Ireland)

Abstract

This letter explores developments in the labour force participation rate in Ireland, which has fallen from a pre-recession peak of 64 per cent to approximately 60 per cent today. Given the important role of labour supply in explaining Irish economic growth, we aim to identify the relative infl uence of structural and cyclical factors in the recent dynamics of Irish labour force participation. We find that the recent decline in female participation is entirely a response to the stage in the economic cycle given the weaker labour market, whereas the fall in male and overall participation also refl ects the infl uence of some structural factors. Accordingly a rise in the participation rate is to be expected in the near term as the economic recovery continues, but in the longer term structural factors will likely constrain further increases in participation.

Suggested Citation

  • Byrne, Stephen & O'Brien, Martin, 2016. "Understanding Irish Labour Force Participation," Economic Letters 01/EL/16, Central Bank of Ireland.
    • Handle: RePEc:cbi:ecolet:01/el/16
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    Cited by:

    1. 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).
    2. Boyd, Laura & Byrne, Stephen & Keenen, Enda & McIndoe Calder, Tara, 2022. "Labour market recovery after a pandemic," Quarterly Bulletin Articles, Central Bank of Ireland, pages 89-129, July.
    3. Masuch, Klaus & Anderton, Robert & Setzer, Ralph & Benalal, Nicholai, 2018. "Structural policies in the euro area," Occasional Paper Series 210, European Central Bank.
    4. Lozej, Matija, 2019. "Economic migration and business cycles in a small open economy with matching frictions," Economic Modelling, Elsevier, vol. 81(C), pages 604-620.
    5. Byrne, Stephen & McIndoe-Calder, Tara, 2019. "Employment Growth: Where Do We Go From Here?," Quarterly Bulletin Articles, Central Bank of Ireland, pages 122-148, July.
    6. Violaine Faubert, 2019. "Why Has Labour Market Participation Not Fully Recovered in Ireland since the Recession?," European Economy - Economic Briefs 051, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    7. Michael O’Grady, 2019. "Estimating the Output, Inflation and Unemployment Gaps in Ireland using Bayesian Model Averaging," The Economic and Social Review, Economic and Social Studies, vol. 50(1), pages 35-76.

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    More about this item

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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