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DISCUSSION ON VARIOUS policy options and decisions by Government is often framed in the context of the income distribution and the impact on families and individuals above and below certain income thresholds. Whether it is tax increases, welfare reductions, wage changes or the new property tax, political and media comment often refers to high and low income families, those earning more than €50,000 or €100,000 etc. Unfortunately, much of this comment tends to be distant from the reality of the income distribution in Ireland – something often cited but much misunderstood.
In its most recent Quarterly Economic Observer, the Nevin Economic Research Institute (NERI) provides a new and detailed insight into Ireland’s income distribution. We do so using data from the Central Statistics Office’s Survey on Income and Living Conditions (SILC) – an annual household survey which collects data from more than 5,000 households and 12,000 individuals to provide a representative sample of Irish society.
Our analysis compiles data for both gross income (earnings, pensions, investments and welfare benefits) and disposable income (gross income minus taxes and PRSI). Both these income concepts are useful as the former captures the overall sum of income a household/individual receives and is often used for classifying them (less than €50,000 etc). The latter, disposable income, captures the amount of post-tax and transfer income households/individuals have to live off; essentially what is in their pockets to spend on all their living expenses.
Starting with households and their gross income, among the key points we highlight are:
Among individuals, the key points on the gross income distribution are:
When you factor in taxation and social insurance deductions, the disposable income picture shows a similar distribution. The average household has a disposable income of just under €46,000 and the top 10% of households have a disposable income of more than €88,000 (almost €1,700 per week). Among individuals, excluding those with zero income, there were 2 million adults with a disposable income of less than €500 per week (€26,000 per annum) and 575,000 with a disposable income of less than €200 per week (€10,400 per annum). At the top of the income distribution, the top 0.8% (25,000 individuals) have a disposable income of more than €2,000 per week (€104,000 per annum).
The data used in our analysis, and in the charts published in the NERI report, are from the 2009 CSO SILC survey. While that data represents the most robust and recently available detailed data on income in Ireland, it is true that household and individual income have changed since then. The combined effects of tax increases, welfare reductions and an increase in unemployment will undoubtedly have shifted most households to a lower income. However, the general shape of our income distribution is unlikely to have changed.
So what does all this income data imply for public policy? While there are a myriad of implications, it is clear that our discussions around Budget time tend to overestimate the number of high income individuals and households and similarly understate the numbers on low incomes. In fact, the data challenges many of the beliefs people have as regards what it is to be receiving a high or low income. While there are no formal definitions of these concepts, the oft-cited threshold that a person is on a high income if they are above €100,000 is questionable; that is a very high income. A person is certainly ‘high income’ if they are in the top 10%; that’s €60,000 plus per annum. Of course, given lifestyle and living expenses such an income may not feel ‘high’.
Similarly, the large concentration of households on incomes between €10,000 and €50,000 – about half the nation’s households – underscores the challenges many households are facing making ends meet given recent tax and PRSI increases and welfare changes. For working households, it also points towards a much greater prevalence of low pay than many assume – a topic the NERI will publish further research on later this year.
The shape of Ireland’s income distribution also suggests that when we are looking for more income tax revenues, or changes to welfare payments (like taxing child benefit etc), that such changes have to be spread across individuals and households in a wide income range for them to generate significant revenues.
Understanding the nature, shape and composition of the income distribution is an important component of our understanding of society and the appropriateness of various policy options. Reflecting this, the NERI is developing a microeconomic model of the Republic of Ireland income distribution which will facilitate an enhanced understanding of the income distribution and the effect on it of changes to earnings, taxes, benefits and entitlements. In outlining the data above, here and in more detail in our recent report, our objective has been to highlight and make accessible information on Ireland’s income distribution. In doing so we hope to enhance broader understandings of incomes in Ireland so that current and future policy assessments can take a more detailed account of whom and how many are at different points of the distribution.
Dr Micheál Collins is Senior Research Officer at the Nevin Economic Research Institute (NERI). The NERI is a research company/think-tank on the Irish Economy launched in March 2012 and funded by a number of unions affiliated to the ICTU. The latest edition of the NERI QEO is available to download at NERInstitute.net.
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How is a swimming pool a tourist attraction ? It’s surely locals of west Dublin going for a swim
The NAC isn’t just a swimming pool. It has a small water park with a few slides, lazy river, wave pool and others I’m probably forgetting.
I take your point Chris but I’m going to go ahead and agree with Tony on this one. I’m not sure this should ever class as a tourist attraction.
I wouldn’t classify it as a tourist attraction, either, to be honest. I just had to clarify that it is not just a swimming pool.
Going by that criteria why isn’t Croke Park up there. With all the matches and concerts every year attendances are in the millions.
Few countries in the world can compare for natural beauty, and for all our faults there is a decency and goodness in Irish people that can be rare to find elsewhere. Sure we are not loved throughout the world as we would like to believe, but that is our own fault because the way a minority behave abroad. We have a wonderful culture that many of us have forgotten, great music, creativity and a brand that most countries would love. And to those who have left, hopefully some day we can welcome them all back some day to a better country, to a better home with some hope for the future. We live in ana amazing country, lets enjoy it!
Many thumbs up!
I was lucky enough as a child to have a father who loved to drive. He took us all over the country. I am grateful to this day for him showing me so much of this country when I was younger.
Stop posting your link in every thread, please
The old romantic view – but we’re deluding ourselves. Our culture is as good as most, no more. And having been forced by the Christian Brothers, and the system to learn Irish (a dead language, virtually) and play Gaelic games – I have preferred and chosen other places to reside.
Just one example, the UK. Steeped in history and where O’Casey, Joyce and Wilde chose to live and work from an early age. The arts there are legendary, as is its education and sport. We tend to live in the past.
Gaelic games, for instance, are still followed avidly here – but nowhere else. Whilst soccer is played in every country on earth (c220) – with over 3.3b currently watching the World Cup. A game invented by the English.
Yes Will – I am one of ‘those who have left’ also. And have no wish to return; I, too, was forced to learn Gaelic (which I never used), attend mass (which I no longer do) and to play Gaelic games (which I stopped, ASAP.
Ireland may be a fine country – but I often wonder why so many had to be pressurised into becoming a stereotype. A fews days in Rome NYC or Venice – would be much more attractive than Dublin or Taytoland……….
There is a difference between living in the past and actually remembering or respecting it. British people tend to have complete amnesia about their history when it comes to imperialism and the slave trade. Most countries are very selective about their history, Ireland and the UK are no different.
Different countries have contibuted differently but equally to the world whether its Karaoke, Halloween, soccer or pasta. I don’t get eith these comparisons which are often inadvertedly used to fuel nationslism. No country is better or worse.
Always surprised that the Guinness storehouse comes top. It’s really not a great experience
I’m a home brewer and while Guinness is the only commercial beer I’d happily drink (Murphy’s great too but don’t live near a Murphy tap), the experience is extremely good imo.
It explains the brewing process very well and in a very accessible manner. I’ve been to the Heineken and Kronenbourg’s respective equivalents and it is very good.
Most places are more like vineyard experiences and I include Jameson in that.
I do not think it is value for money however. It is very expensive but as an attraction I think it’s well done.
It’s a money msling racket!
There’s a list to keep your kids off iPads , phones , computer games for a few weekends . Get out and enjoy what’s on offer .
*Sent from your iphone :p
So Dublin then !!!! I know thousands of other places NOT in Dublin that should replace most of what’s on that list ! There is more to IRELAND than DUBLIN !!!!
It’s based on pure visitor numbers. Dublin is by far the most visited in terms of tourists so it naturally will dominate the list.
Yeah like Cork and Kildare and Meath…oops sorry they’re already on the list!
To
The butter museum in Cork city has yet again been mistakenly passed over!
As has indeed the English Market
I think footfall in the Market would be difficult to judge.I love the place and would recommend it to anyone but trying to figure out who is local and who is a tourist is not really possible.
The National Aquatic Centre?! Really?!
What about Muckross
Been to most of them. But for me Fota Wildlife Park (if that’s want you want to call it !) was a major disappointment.
You mean the overpriced glorified “exotic” farm where all the animals are depressed off their heads, couldn’t agree more!………. Ps if anyone from Fota happens to read this for gods sake clean the water down there it’s horribly murky and full of rubbish oh and give the animals some quality of life, that poor eagle in that tiny enclosure (small cage) looks like he needs a good feed of prozac not to mention all the other poor creatures depressed off their heads, for the money your charging it shouldn’t be a problem!!!
Number 5 looks like it could be a dole que
Be nice to see the Boyne Valley up there or any of our historical monuments further afield ie outside the major cities. The convenience of the Dublin and Cork attractions is plain to see but there is no denying the breadth and variety of our attractions. Also, wasn’t that impressed with Fota Wildlife Park recently, but then again, I am comparing it to Dublin Zoo, which I love.
I would have hoped the national leprachaun museum would make the list. My favourite Dublin attrsction by far,
Too small!!! Too small!!!!
A jail – are you joking me?
No wonder Tourism Ireland has been pestering the government – for years – to invest in some new activity-based attractions.
Such as they have in most other countries in Europe – including those equivalent to the size of Ireland.
Build it, and they will come.
Im very pleased that the jail made the list. Its the one thing I always tell visitors to do when they come here.
Its well run and the tour guides are very knowledable, Im sure that alcatraz would be on the list in california.
AFAIK Tayto park got, or are in the process of planning permission for a few roller coasters.
Don’t put down Tayto… You might have a chip on your shoulder. Sic!
The cliffs of mohar are not as spectacular as I expected .. giants causeway is much more cooler
Stick on Dublin Liffey Board. All kinds of wild life there
Been too all
The “Barack Obama ” plaza will be number one next year..can’t wait
6 out of the 10 are in Dublin i don’t think so….
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