Ireland 2015 more inclusive and productive Dublin 15 September

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Information about Ireland 2015 more inclusive and productive Dublin 15 September

Published on September 14, 2015

Author: oecdeconomy

Source: slideshare.net

1. www.oecd.org/eco/surveys/economic-survey-ireland.htm OECD OECD Economics 2015 OECD ECONOMIC SURVEY OF IRELAND More inclusive and productive 15 September 2015

2. How is life in Ireland? Generally good. 2Source: OECD Better Life Index 2015 0 1 2 3 4 5 6 7 8 9 10 Income and wealth Jobs and earnings Housing Work and life balance Health status Education and skillsSocial connections Civic engagement and governance Environmental quality Personal security Subjective well-being Ireland OECD

3. Household income inequality is below the OECD average 3 Source: OECD Income Distribution Database Ireland’s comprehensive welfare system protected vulnerable groups during the crisis and underpinned the social cohesion needed to make reforms possible 0 5 10 15 20 25 30 0 5 10 15 20 25 30 DNK CZE FIN SVN ISL SVK BEL NOR SWE DEU CHE NLD AUT LUX HUN POL FRA IRL NZL CAN AUS OECD EST PRT GBR KOR JPN ITA ESP GRC ISR TUR USA MEX ratioratio Ratio of incomes of the top 10% vs. bottom 10%, 2012 Note: Incomes after tax and transfers

4. Impressive reforms in recent years 4 Source: OECD and Irish Statute Book Reform Main Legislation Enacted New or empowered regulator Remaining steps to be taken Fiscal December 2012 Yes … Financial and Banking Oct 2010 and August 2013 Yes … Personal Insolvency December 2013 Yes … Competition July 2014 Yes … Corporate Governance December 2014 No Water March 2013 Yes Complete the roll-out of household water meters Labour Market Activation No legislation. Pathways to Work Reforms start February 2012 Yes Full roll-out of contracting out of job- search services Further Education and Training October 2013 Yes Design and implement new apprenticeships and vocational training. Government Accountability & Transparency July 2013, July and October 2014 Yes Health (Pharmaceuticals pricing) May 2013 Yes

5. Strong real GDP growth has returned 5 Source: OECD Economic Outlook 97 Database, projections revised as of 10 September 2015. Y-o-Y % growth Billion EUR 40 60 80 100 120 140 160 180 200 220 -6 -4 -2 0 2 4 6 8 10 12 1990 91 92 93 94 95 96 97 98 99 2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 GDP growth (lhs) Real GDP (rhs) GDP Growth 2014 5.2% 2015 5% 2016 4%

6. 130 thousand new jobs since early-2012 have reduced unemployment 6 Source: Central Statistics Office 0 2 4 6 8 10 12 14 16 0 2 4 6 8 10 12 14 16 %% Seasonally adjusted monthly unemployment rate Monthly unemployment rate 9.5%, August 2015

7. The budget deficit is falling 7 Source: OECD, National Accounts and OECD Economic Outlook 97 Database, projections revised as of 10 September 2015 Bank recapitalisation General government deficit -35 -30 -25 -20 -15 -10 -5 0 -35 -30 -25 -20 -15 -10 -5 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 % of GDP% of GDP

8. Public debt should be reduced 8Source: Economic Outlook Database No. 97; OECD Calculations Note: All scenarios use the projections in the Economic Outlook Database No. 97 for the years 2015 and 2016, revised as of 10 September 2015. General government gross debt, debt simulation analysis 0 20 40 60 80 100 120 140 0 20 40 60 80 100 120 140 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 GDP growth 1.8%; balanced budget GDP growth 1.8%, fiscal balance -2.8% of GDP GDP growth 0%, balanced budget % of GDP % of GDP

9. Household debts make Ireland more vulnerable to international shocks 9Source: OECD, Financial Indicators Database. Household debt, 2013 or latest available 0 50 100 150 200 250 300 0 50 100 150 200 250 300 % of disposable income % of disposable income

10. Non-performing loans are still high 10Source: IMF Financial Soundness Indicators and Central Bank of Ireland The legal system is slow to resolve non-performing loans Note: The definition of non-performing loans is not entirely standardised across countries. Many, including Ireland, are loans overdue for more than 90 days. Non-performing loans, 2014Q4 or latest available 0 5 10 15 20 25 30 35 0 5 10 15 20 25 30 35 CAN SWE KOR AUS NOR JPN USA GBR TUR MEX NLD AUT BEL DNK FRA POL SVK CZE ESP PRT SVN HUN ITA IRL GRC % of total loans % of total loans

11. Property prices are rising again 11Source: OECD, Economic Outlook Database Take further supervisory measures as needed Real housing prices 75 100 125 150 175 200 75 100 125 150 175 200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Index 2000=100Index 2000=100 Denmark Netherlands United Kingdom Ireland

12. Making growth more inclusive

13. The tax and transfer system reduces inequality by more than any other country in the OECD 13 Note: 2012, for Canada 2011, GINI coefficient before and after taxes and transfers Source: OECD Income Distribution Database 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 DNK SVK SVN NOR CZE ISL FIN BEL SWE AUT NLD CHE HUN DEU POL LUX IRL FRA KOR OECD CAN AUS ITA NZL ESP EST PRT GRC GBR ISR USA TUR MEX Gini before taxes and transfers Gini after taxes and transfers

14. Ireland’s relative poverty rate remains low 14 Source: OECD Income Distribution database. Poverty rate after tax and transfers, 2012 Note: Percentage of the population with income below 60% of the median, latest comparable information 0 5 10 15 20 25 30 0 5 10 15 20 25 30 CZE ISL DNK SVK FIN NLD NOR DEU FRA AUT IRL SVN CHE LUX HUN POL SWE GBR OECD BEL CAN ITA NZL PRT KOR EST AUS ESP GRC JPN USA CHL ISR MEX TUR % of total population% of total population

15. The gender wage gap is low 15Source: OECD Employment and Labour Market Statistics 0 5 10 15 20 25 30 35 40 0 5 10 15 20 25 30 35 NZL BEL LUX GRC NOR DNK ESP HUN POL ITA SVN IRL FRA ISL SVK SWE MEX OECD CZE CHL PRT DEU GBR USA AUS AUT CHE FIN CAN TUR NLD ISR JPN EST % of male median wage% of male median wage Note: 2013 or latest available. The gender wage gap is unadjusted and is defined as the difference between median earnings of men and women relative to median earnings of men. Data refer to full-time employees.

16. 60% of jobseekers have been unemployed more than 12 months, with the risk of scarring effects 16Source: OECD calculations based on quarterly national labour force surveys Note: Countries are shown in ascending order of the share of long-term unemployment in total unemployment in Q4 2014. a) Data are not seasonally adjusted but smoothed using three-quarter moving averages. OECD is the weighted average of 33 OECD countries excluding Chile. b) 2013 for Israel. % Long term unemployment, % of total unemployed 0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 70 80 KOR MEX NZL ISR ISL CAN TUR SWE AUS USA DNK FIN LUX AUT NOR GBR OECD CHE JPN POL FRA NLD EST DEU HUN CZE BEL ESP SVN IRL PRT ITA SVK GRC % %

17. Many low income families with children face strong disincentives to work 17 Source: OECD Taxing Wages (database). Marginal effective tax rate 67% of the average wage, single, two children, percent (2014) Reduce housing and welfare assistance payments more gradually as in-work income increases, so as not to discourage work 0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 70 80 CHL KOR MEX ISR CHE POL JPN SVN DNK NZL EST NOR TUR OECD SWE SVK CZE GRC HUN LUX USA NLD PRT ISL ESP DEU FIN ITA AUT FRA AUS CAN BEL IRL GBR % %

18. Childcare is expensive 18Source: OECD, Tax-Benefit Models; www.oecd.org/els/social/workincentives. Improve access and affordability of quality childcare, particularly for low income families 1. EU and OECD averages exclude Chile, Italy, Mexico and Turkey. Lone parent, net cost, as percentage of average wage, 2012 0 5 10 15 20 25 30 35 40 45 0 5 10 15 20 25 30 35 40 45 KOR DNK LUX PRT SWE BEL DEU FRA AUT GRC ISL HUN GBR CHE POL EST ESP NOR NLD EU¹ OECD¹ AUS SVN FIN JPN NZL ISR CZE CAN SVK USA IRL % of average wage % of average wage

19. Getting the most out of migration

20. Migration is turning around 20 Source: CSO up to 2014. Projections for 2015 and 2016, based on equations described in the OECD Economic Survey of Ireland 2015 and unemployment rates as projected in OECD Economic Outlook. • Promote greater participation from immigrants in employer provided training • Provide English language support to students with foreign language backgrounds -60 -40 -20 0 20 40 60 80 100 120 -60 -40 -20 0 20 40 60 80 100 120 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Immigrants minus emigrants Thousand persons Thousand persons

21. “Brains exchange” More than half of migrants are tertiary qualified 21 Source: Central Statistics Office (CSO) Encourage and facilitate SMEs using trust-based work permit schemes so they can access foreign talent Education attainment, 2014 0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 70 80 Emigrants Immigrants Thousand personsThousand persons Tertiary Secondary

22. Raising productivity

23. Productivity growth has slowed 23 Source: OECD Economic Outlook database. • Intensify competition in legal, port and electricity services • Expand the National Competitiveness Council into a Productivity Commission Total factor productivity growth -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 -1 -0.5 0 0.5 1 1.5 2 2.5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 % Ireland United-Kingdom Netherlands United-States %

24. Government support for R&D is modest 24 Source: OECD (2014),OECD Science, Technology and R&D Statistics (database), July and OECD Science, Technology and Industry Scoreboard 2013. • Steadily expand research student placements in firms • Ensure Enterprise Ireland’s Technology centres are demand driven • Focus Technology centres on improving product quality and production processes 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 CHL MEX HUN POL GRC SVK AUS IRL NZL ISR SVN CAN ITA GBR ESP LUX BEL OECD CZE FRA NLD JPN NOR AUT CHE EST SWE USA DEU PRT DNK ISL KOR FIN % of GDP% of GDP

25. Government innovation support to business is skewed towards R&D Tax credits 25 Source: OECD (2014),OECD Science, Technology and R&D Statistics (database), July and OECD Science, Technology and Industry Scoreboard 2013. Rebalance innovation supports towards direct grants Government support for business innovation 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 MEX CHL POL CHE SVK LUX ITA TUR NZL FIN DEU JPN DNK EST PRT SWE AUS NOR OECD ESP GBR NLD IRL HUN CZE AUT CAN BEL USA SVN FRA KOR R&D grants R&D tax incentives % of GDP% of GDP

26. More Information… www.oecd.org/eco/surveys/economic-survey-ireland.htm OECD OECD Economics Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 26

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