Central Bank study highlights 'hidden' workers in Irish economy
So-called 'hidden' workers could enable the economy to continue to grow for a number of years, economists have claimed.
It had been feared that there are insufficient workers to sustain our current pace of growth - with unemployment down to 6.4% in June.
However, new research by the Central Bank found that thousands of people who are willing to work were not included in the official statistics.
“A key characteristic of these broader measures of unemployment is that they assign the same weight to all non-employed individuals outside the labour force,” says the report.
“As a result, they do not take into account the substantial differences in the degree of labour force attachment of different individuals.”
Central Bank economists Stephen Byrne and Thomas Conefrey have constructed a new “Non-Employment Index” (NEI) for Ireland, distinguishing between groups like short- and long-term employed, discouraged workers and passive job seekers.
Using the NEI, the Central Bank economists found that the non-employment rate in the last quarter of 2016 had declined to 7.9%.
When underemployed workers (defined as individuals currently in a job but with a desire to work more hours) are included the estimated non-employment rate in Q4 2016 increases to 9.4%.
“Our analysis suggests that they may be some scope for the unemployment rate to fall further before significant inflationary pressures emerge, but labour supply conditions are tightening as a strong recovery continues,” say the economists.
