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Structural Reforms to Reduce Unemployment and Restore Competitiveness in Ireland

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  • Álvaro Pina

    (OECD)

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).

Suggested Citation

  • Álvaro Pina, 2011. "Structural Reforms to Reduce Unemployment and Restore Competitiveness in Ireland," OECD Economics Department Working Papers 910, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:910-en
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    File URL: http://dx.doi.org/10.1787/5kg0szws6t6c-en
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    Cited by:

    1. FitzGerald, John, 2012. "Fiscal Policy for 2013 and Beyond," Papers BP2013/1, Economic and Social Research Institute (ESRI).
    2. repec:esr:chaptr:jacb201240 is not listed on IDEAS
    3. repec:esr:chaptr:jacb201239 is not listed on IDEAS
    4. Callan, Tim, 2012. "Budget Perspectives 2013," Research Series, Economic and Social Research Institute (ESRI), number RS28.
    5. International Monetary Fund, 2012. "Ireland; Selected Issues," IMF Staff Country Reports 12/265, International Monetary Fund.
    6. 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).

    More about this item

    Keywords

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

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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