A Comparative Perspective on Trends in Income Inequality in Ireland

Abstract

Both overall income inequality and inequality in the distribution of earnings rose sharply during the 1980s and 1990s in a number of industrialised countries, notably the UK and the USA. This makes it particularly important to know how the distribution of income in Ireland has been changing over time, how it compares with other countries, and what factors contribute to explaining Ireland’s particular experience. This paper addresses these issues with household survey data allowing us to provide a picture of the distribution of household income in Ireland up to 1997. This allows us to assess for the first time how inequality has been changing during Ireland’s boom. Comparisons are also made with recent estimates for other countries, notably from the European Community Household Panel, so that both Ireland’s current distribution and trends over time can be placed in comparative perspective. A decomposition analysis of changes over time is implemented, and trends in the distribution of earnings among individual employees are also analysed.