by HRHQ Editorial Team
New research, published by the ESRI and commissioned as part of the Institute’s research programme with the Shared Island Unit, Department of the Taoiseach, provides a high-level comparison of the economies of Ireland and Northern Ireland (NI) in recent years. The report covers a broad range of dimensions including demographics and labour market trends, living standards, economic structures, education, health, and overall well-being.
The research recognises that the economies North and South on the island are distinct in important structural respects. Northern Ireland is part of the wider UK economy, with significant implications for trade and public policy. Ireland, on the other hand, is a national-level economy and an EU Member State, so direct comparisons between the two will not always be on a like-for-like basis. Nevertheless, the research provides a range of important insights on the relative performance of both economies over recent years.
It is also important to note the relatively strong economic growth in Ireland and the impact of Brexit on the whole of the UK in recent years, which additionally saw an absence of a functioning Northern Ireland Executive for a prolonged period. These wider contexts are reflected in metrics over recent years, but may not continue to impact in the same way in the time ahead.
Ireland’s population is growing faster than NI’s, largely due to strong net migration in recent years. This has resulted in Ireland having a younger population, with a lower old-age dependency rate.
The report finds widening gaps in all commonly used measures of living standards and these gaps favour Ireland. It focuses on reliable measures of living standards that are not distorted by globalisation effects, which is important for Ireland.
While Great Britain (GB) remains NI’s largest trading partner, NI’s trade with GB has declined since 2015, while trade with Ireland has increased.
Across all age-groups in 2022, education enrolment rates are higher in Ireland than in Northern Ireland. For example, only 71% of 15–19 year olds in NI are in education vs. 94% in Ireland, a gap of over 20 percentage points.
NI has a higher share of public sector employment (29.2% in NI vs. 25.3% in Ireland).
Employment in Ireland is more heavily concentrated in high-value added sectors like ICT and financial services (9.8% of jobs in Ireland vs. 5.4% in NI). Manufacturing in Ireland accounts for 44% of gross value added, over 2.5 times NI’s share.
Labour productivity in NI lagged that of Ireland in most sectors. NI is more productive in ‘construction’ and ‘agriculture and ‘forestry and fishing’. Labour productivity in Ireland is more than 2.5 times NI’s, with the gap particularly influenced by the role of foreign-owned firms in Ireland.
Adele Bergin, an author of the report and an Associate Research Professor at the ESRI, said: “Ireland has experienced stronger economic growth, higher wages, and higher living standards in recent years. The gap in economic performance and well-being indicators between Ireland and Northern Ireland is widening.”
Seamus McGuinness, an author of the report and a Research Professor at the ESRI, said: “The report provides a contemporary analysis of relative economic performance of both economies and allows for differences, in both the levels and evolution of key performance metrics, between Ireland and Northern Ireland to be better understood.”
You can read the report here
