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

74 The Distribution of Income in Irelandbiased technical change and globalisation and competitionfrom developing countries. Here we look at returns to educationand changes in the educational profile of employees in theIrish case, and the extent to which this may have contributed toincreasing earnings dispersion. The fact that this increase inearnings inequality has not been experienced to anything likethe same extent in some other industrialised countries has alsofocused attention on the role of institutional factors such as centralisedwage bargaining and minimum wage legislation. Wetherefore also point to some relevant features of the Irish institutionalbackground.During the 1980s and into the 1990s, there has been a rapidrise in the level of educational attainment of those leaving theIrish education system. This reflects substantially higher numberscompleting full second-level education rather than leavingearly, and a marked increase in the proportion going on tothird-level education. As cohorts containing a high proportionwith relatively low levels of education retire and those withrelatively high levels enter the labour force, this has producedthe rather dramatic change in the education profile of employeesbetween 1987 and 1994 shown in Table 6.4. Whereas in1987 28 per cent of employees did not have a formal qualificationbeyond primary level, by 1994 this had fallen to 17 percent. This was accompanied by a rise in the percentage withpost-secondary school attainment levels from 18 per cent to 24per cent. We now go on to explore the relationship betweenthis changing education profile and the distribution of earnings.Table 6.4: Education Attainment Level, Ireland 1987 andHighest Qualification AchievedPrimary onlyJunior cycleLeaving Cert.Certificate/DiplomaJJegreeAllThe Distribution of Earnings 75Table 6.5 looks first at median earnings by education categoryand how this evolved between 1987 and 1994. The greatestpercentage increase over the period was for those with universitydegrees, for whom the median rose by 52 per cent, comparedwith 30-38 per cent for the other attainment levels. Thetable also looks at dispersion within education categories, interms of the ratio of the top to the bottom decile. This measureshows that the degree of dispersion was widest within the postschoolnon-degree category in each year, but rose considerablywithin the bottom and the top education categories between1987 and 1994.Table 6.5: Median Hourly Earnings and Ratio of Top toBottom Decile by Education Category, All Employees, 1987and 1994 (IR£ per hour)Primary onlyJunior cycleLeaving CertificateDiploma/other thirdlevelDegree'AiPMedian19873.753.834.355.488.404.30Median19945.005.285.687.2312.785.98%Increase33.337.930.632.952.139.1Top Decile/Bottom Decile19872.733.443.804.563.234.1619943.163.863.764.733.904.77With the balance between men and women in the workforcechanging, it is also interesting to look at male and female employeesseparately. The educational profile of male and femaleemployees changed in very much the same way as that for allemployees. Although a higher proportion of men than womenhad only primary-level qualifications, this declined very rapidlyfor both, and the percentage with post-school qualificationsalso rose substantially for both men and women. The relativelyrapid increase in median hourly earnings between 1987 and!994 for those with university degrees was also seen bothamong men and women, and the same is true of the consider-