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Ireland's Income Distribution in Comparative Perspective

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  • Brian Nolan
  • Timothy Smeeding

Abstract

One of the most frequently expressed concerns about the unprecedented economic boom that Ireland experienced in the second half of the 1990s has been that the benefits were not shared evenly, that rising living standards were accompanied by widening gaps leaving Ireland with a particularly unequal distribution of income. This paper examines Irelands income distribution in comparative perspective, and seeks to shed some empirical light on what happened during the boom and how Ireland compares to other rich countries. It begins by using the data from the OECD and the Luxembourg Income Study to compare Irelands degree of income inequality with other advanced countries. It then looks in some detail at what alternative sources of survey data suggest about key trends in income inequality in Ireland from 1994 to 2000. Since there is a particular interest in what happened right at the top of the distribution, this is then examined using data from the administration of the income tax system. We conclude that the spectacular economic growth in the past decade has seen the gap in average income between Ireland and the richer OECD countries narrow dramatically. However, this growth has not greatly affected the Irish ranking in terms of income inequality. Ireland remains something an outlier among rich European nations in its high degree of income inequality, though still falling well short of the level seen in the USA. In the end, Irelands new-found prosperity provides a social dividend, and choices about how it is used will fundamentally affect whether the current high level of income inequality persists into the future.

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  • Brian Nolan & Timothy Smeeding, 2004. "Ireland's Income Distribution in Comparative Perspective," LIS Working papers 395, LIS Cross-National Data Center in Luxembourg.
  • Handle: RePEc:lis:liswps:395
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    1. Bruce Bradbury & Markus Jantti, 1999. "Child Poverty across Industrialized Nations," Papers iopeps99/70, Innocenti Occasional Papers, Economic Policy Series.
    2. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 1-41.
    3. Whelan, Christopher T. & Layte, Richard & Maitre, Bertrand & Gannon, Brenda & Nolan, Brian & Watson, Dorothy & Williams, James, 2003. "Monitoring Poverty trends in Ireland: Results from the 2001 Living in Ireland Survey," Research Series, Economic and Social Research Institute (ESRI), number PRS51.
    4. Thomas Piketty, 2003. "Income Inequality in France, 1901-1998," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1004-1042, October.
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    Cited by:

    1. Timothy Smeeding, 2005. "Poor People in Rich Nations: The United States in Comparative Perspective," LIS Working papers 419, LIS Cross-National Data Center in Luxembourg.
    2. Cormac Ó Gráda, 2005. "You Take the High Road and I’ll Take the Low Road - Economic Success and Wellbeing in the Longer Run," Working Papers 200510, School of Economics, University College Dublin.
    3. Edgar Morgenroth, 2010. "Regional Dimension of Taxes and Public Expenditure in Ireland," Regional Studies, Taylor & Francis Journals, vol. 44(6), pages 777-789.
    4. Whelan, Christopher T. & Layte, Richard, 2004. "Economic Change, Social Mobility and Meritocracy: Reflections on the Irish Experience," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2004(3-Autumn), pages 1-20.
    5. Elvire Guillaud & Matthew Olckers & Michaël Zemmour, 2020. "Four Levers of Redistribution: The Impact of Tax and Transfer Systems on Inequality Reduction," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(2), pages 444-466, June.
    6. E. Calvert & Brian Nolan & Tony Fahey & D. Healy & A. Mulcahy & B. Maître & Michelle Norris & I. O’Donnell & Nessa Winston & Christopher Whelan, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Ireland," GINI Country Reports ireland, AIAS, Amsterdam Institute for Advanced Labour Studies.
    7. 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.
    8. Timothy Smeeding, 2006. "Poor People in Rich Nations: The United States in Comparative Perspective," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 69-90, Winter.
    9. O'Donoghue, Cathal & Sologon, Denisa Maria, 2023. "The Transformation of Public Policy Analysis in Times of Crisis – A Microsimulation-Nowcasting Method Using Big Data," IZA Discussion Papers 15937, Institute of Labor Economics (IZA).

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