1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Structural Reforms to Reduce Unemployment and Restore Competitiveness in Ireland

After a recession of historic proportions, an export-led recovery is gaining traction in Ireland. The pace of recovery, however, varies sharply across sectors. While export-oriented manufacturing and services, led by large multinationals, have reached record-high levels of output, inward-oriented sectors, where Irish-owned SMEs predominate, are by and large still struggling to emerge from the crisis. Reflecting the weakness of this traditional sector, which is labour intensive, unemployment rates remain very high, particularly among young men with low or intermediate qualifications, often formerly employed in the construction sector.

To tackle high and persistent unemployment and thus stave off social exclusion, Ireland needs to further pursue an integrated three-pillar strategy: welfare reform to ensure that work pays; better activation policies to assist labour reallocation across sectors; and a sustained restraint in wages and other business costs to restore international competitiveness. In particular, often building on recent policy initiatives or commitments, this paper recommends reforms to further enhance product-market competition, improve innovation efforts and ameliorate the quality of education, which are key to economic prosperity.

This Working Paper relates to the 2011 OECD Economic Survey of Ireland (www.oecd.org/eco/surveys/ireland).

English

Keywords: education, unemployment, activation policies, labour costs, welfare system, electricity, competitiveness, constant market share analysis, Ireland, international trade, competition, R&D, technology transfer
JEL: L40: Industrial Organization / Antitrust Issues and Policies / Antitrust Issues and Policies: General; J68: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Mobility, Unemployment, and Vacancies: Public Policy; L94: Industrial Organization / Industry Studies: Transportation and Utilities / Electric Utilities; F40: International Economics / Macroeconomic Aspects of International Trade and Finance / Macroeconomic Aspects of International Trade and Finance: General; J64: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Unemployment: Models, Duration, Incidence, and Job Search; J52: Labor and Demographic Economics / Labor-Management Relations, Trade Unions, and Collective Bargaining / Dispute Resolution: Strikes, Arbitration, and Mediation; Collective Bargaining; I38: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs; I28: Health, Education, and Welfare / Education and Research Institutions / Education: Government Policy; F10: International Economics / Trade / Trade: General
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