NI’s exchequer transfers make us a more prosperous society than the south…

Interesting report from Maynooth finds that Northern Ireland is more prosperous than Ireland, indeed DUP run Castlereagh leads the affluence league for the whole island followed by Dún Laoghaire-Rathdown, North Down, Antrim and Lisburn….

Carl O’Brien in the Irish Times reports:

Unemployment levels across many parts of Northern Ireland, for example, are half the rates south of the Border.

The North also has a much more even spread of affluence right across the six counties, whereas well-off areas in the Republic are mostly confined to major cities and their commuter belts.

Rural areas of the South are much more likely to suffer from extremes of deprivation, such as high unemployment, a falling population and poor levels of education.

By drawing on census data collected from both sides of the Border in 2011, researchers have been able to map the distribution of affluence and deprivation across the island, right down to street level.

Specifically they isolate a split in the republic between urban prosperity and rural poverty…

People with high levels of education, prestigious occupations and a high social-class position appeared to be able to live in more rural areas in the North and commute to work in an urban centre.

In the Republic, however, rural or peripheral areas were much more likely to suffer from the extremes of deprivation, such as falling populations, poor education levels and high unemployment.

“The hinterland in the North is better connected to the main population centres,” he said, “so you can afford to have a concentration of jobs or services in a few urban areas, while keeping it accessible for the rest.

“That link is broken in the South. There are vast areas which are not just rural, but deprived as well. They don’t have the kind of connections to job opportunities, career prospects or essential services.

“With the closure of banks, post offices and Garda stations, you have a spiral effect. The more it happens, the less they become attractive or sustainable places to live.”

Mr Haase added: “You are seeing the effects of 30 or 40 years of migration. If you have people leaving, there is a thinning out of the working-age population, or a brain drain.”

IN fact, you could probably take that period and double or triple it. As the Techies like to say, migration is a feature not a bug in the Irish system. The data poses some real questions, not least the social effects of Ireland’s long term commitment to the small open economy model.

And also, perhaps important questions about Northern Ireland’s capacity to sustain extraordinarily high levels of public subsidy in the context of a steadily falling economic tide?

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  • smcgiff

    As noted, the figures were taken at the worst possible time for the ROI and NI’s only at the beginning of inevitable readjustment (normalisation), but NI definitely has the advantage when it comes to rural integration. The gravity of Dublin, and, to a lesser degree, Cork city is too large in comparison to rural areas in the ROI.

  • John O’Brien

    Interesting study. I don’t think income or GDP/GVA (which is usually cited) are included in this study. Of course, there’s more to life than average income and GDP …

    The two big drivers in this result are higher unemployment and negative population change in the South. To put the difference in context, in 2011 Derry had Northern Ireland’s highest unemployment rate (at 12.4%). Yet if it was in the Republic, it would be one of the 3rd lowest – just 1% higher than Dublin South and Dun Laoghaire! The rate has fallen in the South since 2011, but so too in the North.

    Some of the other variables the South does better (has less % of lone parents, lower qualified, “Low Social Class”). Though North does a bit better in having more “High Social Class” (31.1% vs 27.9%)

    Btw, the variable used in the study are:

    1) Demographic Profile is measured by five indicators:

    –percentage change in population over the previous five years
    –percentage of people aged under 15 or over 64 years of age
    –percentage of people with low educational achievements
    –percentage of people with a third-level education
    –mean number of persons per room

    2) Social Class Composition is also measured by five indicators:

    –percentage of people with low educational achievements
    –percentage of people with a third-level education
    –percentage of households of high social class
    –percentage of households of low social class
    –mean number of persons per room

    3) Labour Market Situation is measured by four indicators:

    –percentage of households with children aged under 15 years and headed by a single parent
    –male unemployment rate
    –female unemployment rate
    –percentage of households of low social class

    – See more at: http://airo.maynoothuniversity.ie/mapping-resources/airo-census-mapping/national-viewers/all-island-deprivation-index#sthash.GXmDEIOk.dpuf

    Full report: http://trutzhaase.eu/wp/wp-content/uploads/2011-All-Island-HP-Deprivation-Index-05.pdf

  • kensei

    The data is three years old and I’d guess some of this has rowed in, and a 20 year view would be fascinating. My guess is the South would peak much higher but fall much lower.

    It does put into sharp relief how shocking the unemployment picture is in the South, especially when you consider that much of the emigration figures are people leaving to find jobs. Leaving out GDP or earnings, net worth and transfers is a bit cheeky, if true – clearly they all feed into relative affluence.

    On the rural / urban divide, there isn’t much of the North that isn’t within commuter distance to Belfast and many people will choose to stay outside, and those that aren’t are closer to smaller urban centres. The South being bigger will have a greater problem with that, especially given the dominance of Dublin. The fact we are so reliant on transfers should be a worry too, given the level of cuts coming and the potential to move a lot of people into poverty.

  • barnshee

    Society depends on external generosity to keep up standards ?
    Not a good business model

  • Zeno3

    GDP in Ireland isn’t a good measure anyway. The top exporters can be companies that process sales made in the rest of Europe and even Australia which are then counted as exports and economic activity in some sort of tax dodge.

  • The difference is that the £ is a fiscal union that accepts the requirement for fiscal transfer to peripheral regions. Whereas, despite all the gains from the € Berlin continues to resist. True the UK is now having to seriously consider the breadth of the State and reign it in a bit, but has had the flexibility to do that where as the ROI has had to do what the Bundestag approves.

  • kensei

    Gnp is a perfectly fine measure, and the South would still be well ahead. You could also look at PPP figures for income, amount of wealth and tax burden. Those selected are interesting measures but it’s non sensical to exclude these sorts of measures if you are assessing affluence.

    Tax avoidance in the South is one egged and everyone else lies about their tax rates. See here http://businessetc.thejournal.ie/ireland-tax-haven-1796050-Nov2014/

  • kensei

    Little trickier than that. German economics has always been a lot more hard money due to the experience of hyper inflation. It’s not just they won’t countenance fiscal transfers, but they won’t allow the monetary policy the rest of Europe needs. They also won’t spend themselves to help the periphery with increased exports, instead pointing to their late nineties onwards experience of keeping costs down. This misses that not everyone can cut at once.

    Result: depressed Europe. It’s a perfect storm that’ll break the Euro if they keep it up.

  • NMS

    Zeno, GNP is no longer an accurate measure too. The arrival of the inversions disrupted this stat.

    The improvement in economic conditions in Ireland is also very skewed towards those who are employed in certain industries. Many of those who became unemployed post bubble, do not have the requisite education or skills to be even considered for those jobs being created. The statistics on the issuance of PPS Nos. (NiNos in the UK) http://www.welfare.ie/en/downloads/ppsn_all_month14.pdf also show there is still an amount of immigration. Research on emigration of Irish people suggests over 80% of those leaving have Level 8 (Hons Degree) or above education.

    Many of the new jobs are being taken by other nationalities because of the skills and education required, but I notice even in my local Costa, all staff are bar two are Polish with just one Irish person working there.

  • Zeno3

    I agree and if GDP is wrong then it follows that GDP per capita is also wrong. Yet that figure is quoted frequently to show how productive Ireland is.

  • That’s detail.

  • kensei

    Perhaps, but it’s not clear to me that all of those things will remain true if Germany seriously wants the EU as a going concern. Anyone would be a significant shift.

    It’s also not clear to me that England will keep paying for NI forevermore, either.

  • kensei

    Didn’t know about GNP. All measures have flaws though – in both cases there is actual, real money going to the Irish Exchequer so it isn’t useless, plus I’m pretty sure an economist compiling a report on relative affluence could come up with something indicative.

    I think it is too early in any potential recovery to make a call on any structural problems. The Irish Government has only started to lift the foot off the neck of the populace. Construction hasn’t really recovered as far as I know. To an extent the adage that a rising tide lifts all boats is true. Increasing revenues in will mean more public investment that will spur more economic activity that will spur more revenues. I’ve no doubt there may well be some structural problems when there is a clearer picture but I suspect it;ll be a wee while yet.