New ESRI research finds a significant 'migrant wage gap', with East Europeans particularly affected, earning 40% less per hour than Irish counterparts

New ESRI research funded by the Department of Children, Equality, Disability, Integration and Youth finds that while non-Irish nationals as a whole earned 22 per cent less per hour than Irish nationals, East European workers earned, on average, 40 per cent less than Irish workers in the period 2011-2018. However, for non-Irish workers overall, this wage gap shrunk over time: from 25.5 per cent in 2011–2013, just after the Great Recession, to 18.7 per cent in 2016–2018. The study also finds migrant women face a double wage penalty. The report draws on high-quality Revenue data on wages matched to Labour Force Survey (LFS) data on jobs and workers to investigate the wage gap.

Key Findings

• Non-Irish nationals are generally more likely to be found in lower quality jobs. For example, they are less likely to work in professional/managerial occupations (33 per cent compared to 44 per cent of Irish nationals). Non-Irish nationals are much less likely to be members of trade unions or staff associations (13 per cent compared to 34 per cent for Irish nationals).
• A ‘migrant wage gap’ exists in Ireland. In the period 2011–2018, non-Irish nationals earned, on average, 22 per cent less per hour than Irish nationals – for every €1 an Irish worker earned, a non-Irish worker earned 78 cents.
• Yet earnings differ considerably depending on origin country. East Europeans earn 40 per cent less per hour than their Irish counterparts. Part of their wage gap can be explained by differences in their social and demographic characteristics (e.g., education level), the kinds of jobs that they do, and firms for which they work. However, even after we account for these differences in characteristics, East Europeans still earn 20.5 per cent less than Irish nationals.  
• For other non-Irish groups, the gap is much smaller – especially those from West Europe, North America, Australia and Oceania. This is partly because they have higher educational qualifications, but they still get lower rewards for education than Irish workers.
• For African nationals their employment rates are very low, and when in work, they earn on average 14 per cent less than Irish nationals, after accounting for background and job characteristics.
• Non-Irish women experience a double earnings penalty: for being female and for being a migrant. Non-Irish women earn 11 per cent less than non-Irish men, who in turn earn 18 per cent less than Irish men. This means non-Irish women earn 30 per cent less than Irish men.
• The migrant wage gap narrowed over time, from 25.5 per cent in 2011–2013, to 18.7 per cent in 2016–2018, in part because the skill level of the non-Irish workers increased and because they are working in higher quality jobs. However, a significant 2.5 percentage point reduction in the wage gap over time remains even after we account for these changes in Irish and non-Irish characteristics.

Policy Implications 

Several possible changes could help reduce the migrant wage gap. The wage premium found among members of trade unions alongside the very low level of membership of such bodies among non-Irish nationals suggests that greater trade union membership would benefit migrant wages. Previous research has also shown that English language skills are clearly related to job quality, so effective English language training for those who need it is also likely to reduce the wage gap.

While Ireland has robust anti-discrimination legislation, specific measures to combat labour market discrimination may be required. In this respect, the current development of an anti-racism strategy in Ireland is very important (Anti-Racism Committee, 2021). Job quality, including wages, should be a priority for migrant integration policy and should be incorporated into the successor to the Migrant Integration Strategy 2017-2021.

Dr James Laurence, report co-author noted: “Wages and working conditions are integral for migrants’ integration into Irish society. Work provides not only necessary income for living expenses but also provides a sense of well-being, social status, and the opportunity to develop social connections. This study highlights how some non-Irish national groups are experiencing a wage penalty, in some cases a substantial one, and that this is persisting over time. One potential driver of this finding may be that the educational qualifications of those concerned do not receive equal recognition by employers in Ireland. Greater efforts may be needed to improve qualification recognition among employers, and raise awareness of the Quality and Qualifications Ireland (QQI) system.”

Minister Roderic O’Gorman said: “I welcome the publication of this report, which provides essential evidence for integration policy. It is clear from the report that a divide exists in the treatment of non-Irish nationals in relation to their wages and working conditions which needs to be addressed. The report further highlights the double disadvantage experienced by non-Irish women in the workforce. With many employers now preparing their Gender Pay Gap reporting, it is timely to consider the outcome of this research, reflect on recruitment practices, and take action where appropriate. This research gives us a fresh opportunity to effect meaningful change in workplace integration.”