The Distribution of Income in Ireland (2000) - Combat Poverty Agency

70The Distribution of Income in IrelandTable 6.1: Distribution of Earnings, Ireland 1987, 1994 and1997As Proportion of MedianAll employees, hourly earnings:Bottom decileBottom quartileTop quartileTop decileFull-time employees, weekly earnings:Bottom decileBottom quartileTop quartileTop decile19870.470.731.371.960.500.751.351.8219940.470.681.502.240.480.721.431.9719970.480.691.532.320.510.71This shows that from 1987 to 1994 there was a consistent wideningin dispersion for both weekly and hourly earnings, particularlyat the top of the distribution. The ratio of the top decileto the median rises from 1.96 to 2.24 for hourly earnings, andfrom 1.82 to 1.97 for weekly earnings among full-time employees.For hourly earnings the bottom decile is the same proportionof the median in 1987 and in 1994, but for weekly earningsamong full-time employees the bottom decile falls from 0.50 to0.48 of the median. The ratio of the top to the bottom decile,commonly used as a single summary inequality measure in thiscontext, rose from 4.2 to 4.8 for hourly earnings and for weeklyearnings of full-time employees the increase was from 3.6 toBetween 1994 and 1997, the top decile continued to movefurmer away from the median, reaching 2.32 for hourly earndeSlIn t 0tt ° m ^ ° f the **•*•** however, the bottomma^rX, T T* "** ** median if' ***** increasingZSZZL T * a reSUlt the'rati of the° *°P to the bottomlv dol atTn r 9 ^ ^ 48 f r hOUlly°eami^s' and m ~9in-C^h I T WeeWy 6arnmgS amon 9 **-*«» worker!SU^ZTJ,^Peri ° d fr ° m 1987 t0 i997 '1.422.02then - there was awages among all employees. This was more pronounced in theThe Distribution of Earnings 711987-94 period than from 1994 on, so rapid economic growthdid not lead to an acceleration in the trend. It was primarilydriven by relatively rapid increases for those towards the top ofthe distribution, with no indication - unlike for example the UKor the USA - that the bottom was falling behind the median.6.4 IRELAND'S EARNINGS DISTRIBUTION IN COMPARATIVEPERSPECTIVEA comparative perspective on the Irish earnings distribution,and on the way it has been changing, can be obtained usingmeasures of earnings dispersion for a range of developedcountries brought together by the OECD (1996b). There arepotentially important differences in definition and coverageacross countries (including whether earnings are weekly or annual),so these comparisons should be treated with extremecare, but they can serve to highlight some key features of theIrish results. Since they cover only up to the mid-1990s, we usethe Irish figures for 1994 and for trends between 1987-1994 forcomparative purposes.First, Table 6.2 shows measures of the level of earnings dispersionin 1994 for Ireland and other OECD countries, forweekly pay among full-time employees (since the figuresbrought together by the OECD generally refer to full-time employees,and to weekly, monthly or annual rather than hourlygross earnings). Ireland is seen to have a particularly high levelof earnings dispersion. Both the ratio of the top decile to themedian and of the median to the bottom decile are among thehighest of the countries covered. With the top decile/bottomdecile summary measure, only Canada and the USA are seen tohave greater earnings inequality than Ireland.As far as trends in earnings dispersion are concerned, Table6.3 shows the ratio of the top to the bottom decile in 1987 and1994 f °r Ireland and the other OECD countries for which thefigures are available for both points in time. We see that oncea gain Ireland is an outlier: the increase in earnings dispersionls the greatest of any of the countries shown. (The US is not includedin this table because OECD 1996 gives only US figures0rmen and women separately, but from these it appears that