Income inequality in Ireland, 1987-2019

Abstract

Ireland has experienced rapid – if volatile – growth over the last three decades. While this performance looks less impressive when considered over a longer horizon and is better seen as belated convergence making up for lost time in the first 50 years of independence, this paper highlights an aspect of the Irish experience that does stand out as quite remarkable: how broad-based and inclusive growth in household disposable income was. Drawing on over three decades of harmonised household survey data, we first show that income inequality fell substantially over this period, the product of disposable income growth that was stronger at the bottom than the middle or top of the distribution. We then tentatively suggest some important factors that might have contributed towards the patterns of growth experienced – including tax and transfer reforms, a rise in two-earner couples and a fall in the average size of households – before concluding with some directions for future research.