Earn and low pay roi ssisi cork 140416

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  • Dr Michel CollinsNERI (Nevin Economic Research Institute)Dublinmcollins@NERInstitute.net

    @ MLGCollinswww.NERInstitute.net

    EarningsandLowPayintheRepublicofIreland

    Statistical and Social Inquiry Society of IrelandCork, 14th April 2016

  • Outline1. Introduction2. Context3. Data4. Earnings5. Hourly Earnings & Low Pay6. Modelling Low Pay7. Conclusion

  • 1.Introduction NERI research project on incomes and low pay

    o QEO Spring 2015 (& 2016)

    Limited understanding of earnings (of all types) Few detailed examinations of low pay (recently)

    o including the MW

    Relevant to know:o for policy formationo for measuring progress etc

  • 2.Context Increasing interest in earnings:

    o Recoveryo Literature on segmentation/polarisation etco Low Pay Commissiono Sustainability of redistributive system (tax & welfare) to

    smoothen the income distribution direct income disposable income relevance of changes to the pre-distribution not looked at for a while

    Literatureo Blackwell (1989), Nolan (1998), Barrett et al (2000)o MW related / OECD annual estimates on low pay

  • Throws up some research questions around:o The structure and distribution of earningso The low paid:

    how many who where

  • 3.Data CSO SILC 2013 (released January 2015)

    o Sample of 4,922 households and 12,663 individualso Detailed income data (direct, gross, disposable)o Income data cross checked with tax and welfare recordso Detailed socio-economic characteristicso Weights for non-response etco Never perfect, buto Earners

    4,449 earners 3,825 receive employment income 654 self employment income 3,369 employees whose PES = at work

    o normal monthly gross earnings in main job & normal hrs per week

  • Market income or direct income

  • leaving out employers PRSI contributions pensions Looking at:

    o all individuals aged 17 years or moreo excluding those with no market income

  • 4.Earnings x3

    o Overallo Employeeso Self Employed

    Charto each bar = 1,000 range of incomeo height = no of individualso merge all those with 150,000+

  • 80% 20%

  • 15%

  • 15% 50%

  • 15% 50%Top 10%

  • 15% 50%Top 10%

    Top 5%

  • GiniCoefficient=48.99

  • 5.HourlyEarnings&LowPay Looking at hourly earnings data for employees Data:

    o PES = at work and who are employeeso gross monthly earnings & no. of hours usually workedo main job

    Three thresholds:o Minimum wage of 8.65 per hour (2013)o Living Wage of 11.45 per hour (2014) = 66% mediano Low Pay Threshold 12.20 per hour (2010)

  • Approximately:

    345,000 employees below 11.45

    400,000 employees below 12.20

  • Who are the low paid? (incidence)o Of all those who are low paid:

    60% women 35% aged 18-29; 28% 30-39yrs; 17% 40-49yrs 24% in wholesale and retail sector 18% in accommodation and food sector 43% work 35hrs+ ; 26% work less than 20hrs 82% permanent contract 50%/50% split across full-time and part-time

  • Who is most likely to be low paid? (risk)o Of all employees who are:

    male 21% are low paid; female 29% aged 18-29 = 53%; 60yrs+ = 25% Sectors:

    o Agri, forestry, fishing = 65%o Accommodation and Food = 61.5%o Admin and Support Services = 52%o Wholesale and retail = 43%

    low hours = 49% Temporary contract = 48% In poverty = 59% are low paid

  • Living Standards and the Income Distribution

    AllEmployees TheLow PaidLivingbelowthepovertyline 3.2% 7.4%Difficultymakingendsmeet 27.5% 35.9%Unabletoaffordunexpectedcosts 45.9% 66.1%Borrowingforordinarylivingexpenses overlastyear

    15.2% 20.7%

    ExperiencingDeprivation 19.4% 31.6%

  • fromTable8:DistributionofthoseatWorkbydecile,2013

  • fromTable8:DistributionofthoseinLowPaybydecile,2013

  • 6.ModellingLowPay Concluding section of the paper Getting a little deeper Logit where dependent variable is earning less than

    12.20 per hour

  • Findings:o Risk of low pay higher for:

    temporary contract workers women private sector workers younger workers (non-linear effect for age)

    o Risk of low pay lower for: part-time household with children Dublin based workers firms of 10+ employees

    o no effect: low hours

    o Splitting into high-income & low-income, but limited difference

  • 7.Conclusion Some policy implications/relevances:

    o structure of worker incomeo taxation policyo the starting point for redistribution (direct income)o the effectiveness of the minimum wageo effectiveness of interventions for low income working

    families?o firm size & temporary contracts

    Raises questionso women and young people.

  • Dr Michel CollinsNERI (Nevin Economic Research Institute)Dublinmcollins@NERInstitute.net

    @ MLGCollinswww.NERInstitute.net

    EarningsandLowPayintheRepublicofIreland

    Statistical and Social Inquiry Society of IrelandCork, 14th April 2016