Saturday 15 December 2018

Disposable income has risen for the poorest here

The income tax system here is recognised as progressive, meaning
those who earn more pay a lot more tax. (Stock picture)
The income tax system here is recognised as progressive, meaning those who earn more pay a lot more tax. (Stock picture)
Charlie Weston

Charlie Weston

Poorer households have not lost out when the economy has grown, unlike the situation in other countries.

A new report from the Economic and Social Research Institute (ESRI) found household disposable incomes have grown strongly in Ireland over the past 30 years, through periods of boom and bust. But income inequality has been broadly stable.

The ESRI report said that over the last three decades the income of low, middle and high-earning households have seen what it says is "substantial growth".

This is unlike the slow and unequal growth seen in the UK and the US. It said that Ireland was once towards the high end of the inequality spectrum for an advanced country.

But it is now close to the Organisation for Economic Cooperating and Development average for income inequality.

The income tax system here is recognised as progressive, meaning those who earn more pay a lot more tax.

And State pension payments have risen.

ESRI report author Tim Callan noted the welfare and tax systems have played a key role in ensuring incomes have grown equally.

The period looked at is from 1987 to 2014, in 'Income Growth and Income Distribution: A Long-Run View of Irish Experience' by Prof Callan, Maxime Bercholz and John R Walsh.

The paper found the greatest gains over the decade were low-income groups, with dual-income couples gaining due to welfare rises.

Irish Independent

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