Work-poor Households: The Welfare Implications of Changing Household Employment Patterns

March 19, 2004

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19/03/2004



Work-poor Households: The Welfare Implications of Changing Household Employment Patterns

Embargo: Midnight, Thursday 18th March 2004

Work-poor Households: The Welfare Implications of Changing Household Employment Patterns

A Press Briefing will be held at the ESRI on Thursday 18th March 2004 at 11.00 amIn the 1980s and early 1990s the very high proportion of Irish households who were ‘work-poor’ was a real concern. A household is ‘work-poor’ if none of the adults of working-age have a paid job. Since the early 1990s the Irish economy has been transformed so this study set out to examine whether the number of work-poor households had decreased and, if so, which households remained work-poor?
Key findings are:

  • Households where NONE of the adults (of working age 18-64) were working fell from 22% in 1994 to less than 14% in 2000. The decline in work-poverty was particularly strong among households with children. In 1994, 27% of children lived in jobless households, this fell to 9% in 2000.
  • The rate of work-poor households in Ireland, which was one of the highest in the EU in 1985, fell to the EU average by 2000.
  • Households where ALL the adults were in paid employment increased from 36% to 49% between 1997 and 2000.
  • Those most at risk of work poverty were the households of older people (55-64), lone parents, those with a chronic health problem or disability, those without qualifications and those with a history of unskilled work. These groups were also more likely to be persistently work-poor i.e. to have no-one in employment for three or more years.
  • The incomes of work-poor households tend to be very low with almost a third of work-poor households living on less than £IR100 (€127) per week and more than three-quarters living on less than £IR200 (€254) in 2000. As one would expect, work-poor households tend to be highly reliant on social welfare with over 80% of total household income coming from this source.
  • By 2000, lone parent benefits and disability/sickness benefits had become a more important source of income for work-poor household than unemployment benefits.
  • Work-poor households experience high rates of income poverty: 74% of work-poor households fall below a poverty line set at 50% of the median income (the median is the income of the household which is half way up the income distribution). This compares to less than 10% of households where at least one person works and 4% in households where all the adult members are employed.
  • Work-poor households also tend to be deprived. In 2000, 29% of work-poor households were experiencing basic deprivation compared to only 6% of households where all adult members worked. Similarly, 25% of work-poor households were ‘consistently poor’ (i.e. deprived and income poor) compared to less than 1% of households where all adult members worked.
  • Members of work-poor households are more likely to experience psychological distress than those in other households. However, the link between household joblessness and distress declined between 1994 and 2000.
  • The analyses show that unemployed people with an employed partner are more likely to enter work than those whose partner is unemployed.

This study is published as ESRI Policy Research Series 52 by Helen Russell, Richard Layte, Bertrand Maître, Philip J. O’Connell and Christopher T. Whelan