Since 2007 the number of people employed in the Irish economy who do not have a secondary education qualification has reduced by 50%. The numbers of people employed who do have only a secondary educational qualification has reduced by 20%.  But the numbers of people employed with a tertiary educational qualification has increased by 12%.

Many will view this as confirmation that Ireland is being transformed into a knowledge based economy. Another way of looking at it is that the working class in Ireland has been devastated by the recession, whereas the middle class has (relatively speaking) prospered.

There are many factors at play here: The devastation of the Irish construction sector since 2007; the rise in participation rates in tertiary education; and the growth of the mostly foreign owned multinational companies in the ICT, pharmaceutical and services sectors.

Many employees who did not have a third level qualification in 2007 will have retired from the workforce or have achieved a third level qualification since. Most of the new entrants into the workforce since 2007 will have had a much higher level of education than previous cohorts, and some of these will have come from a working class background.

However the educational system is still overwhelmingly the mechanism by which the middle class can propagate itself:

2003/2004 (PDF alert)

Participation in higher education in Ireland is a success story. From a low base of 11% participation in 1966, and still as low as 20% in 1980, today some 55% of school leavers are entering higher education. While this is still somewhat short of leading OECD countries, it is a very rapid increase in a relatively short period of time. A key part of this progress has been a wider and deeper understanding of the role higher education plays in personal development and economic well being as Ireland moves to being a knowledge economy. Another contributor has been the range of measures put in place to encourage those not traditionally represented to enter higher education, including adult learners, people with disabilities and those from less advantaged socio-economic backgrounds. This is a very positive development for the people concerned but also because we can better achieve our ambition to be a knowledge economy if we provide avenues to participation by all who can benefit.

Indeed the proportion of students in tertiary education in Ireland is still not especially high by European standards:

But over half of those in tertiary education come from a professional family background: (PDF Alert – Figures 5a and 5b only available in PDF)


In keeping with the international pattern, Figure 5a indicates that those from professional backgrounds make up over half of the student group; this group is, therefore, over-represented compared with their prevalence in the national population (see Fitzpatrick Associates and O’Connell, 2005). The pattern is consistent with evidence from earlier time-points (see Ryan and O’Kelly, 2001; Clancy and Hall, 2000). Figure 5b shows that part-time students are somewhat more likely to come from semi-skilled or unskilled manual backgrounds, and less likely to come from professional backgrounds, than full-time students. The Eurostudent survey of 2003/2004 revealed that the majority of students’ mothers and fathers are economically active as employees (see Figure 6). Only a small percentage of respondents reported that their parents were unemployed. Compared with the national population, those from unemployed households are under-represented in higher education.

What the above quoted ESRI report fails to mention is that the fees and costs associated with tertiary education have increased significantly in recent years, and dramatically reduced its affordability for students from less advantaged backgrounds.

Minister for Finance, Michael Noonan, has shown at least some appreciation that any widespread recovery must also include a jobs boost for sectors like construction and tourism more associated with working class employment:

Innovative Noonan draws attention to plight of the long-term jobless

He cited, as an example of how government could achieve policy objective by tax changes rather than those on the expenditure side, the reduced VAT rate he had introduced for the tourism and hospitality industry. There is no doubt, he said, that the reduced rate had had not only a multiplier effect but also a psychological effect in helping lift tourism and hospitality out of the doldrums into which they had fallen when the crisis began. The reduced VAT rate had worked so well that he had decided to retain it in this week’s budget.

Noonan then spoke at some length about two tax-related initiatives, which he had announced this week in the construction sector. The first of these was the home renovation incentive, which will give up to €4,050 in a rebate to those who spend between €5,000 and €30,000 on renovations or home improvements. The second is a provision that allows those on the live register for more than 18 months to set up a business and earn up to €40,000 free of income tax in the first two years.

Of course, not many can afford home improvements on that scale, and few people unemployed for more than 18 Months will have the capital to set up a business. So the job creation effects are likely to be marginal at best.

Ireland lacks an apprenticeship system on the scale of Germany to promote skilled employment in a wider range of non-white collar occupations and so the overwhelming emphasis is on achieving success in a very academically based educational system.

All of this raises the question of how sustainable Ireland’s economic transformation will be, heavily dependent as it is on attracting mainly US knowledge based industries which are extremely mobile and which could easily re-locate elsewhere. The other question is whether the recovery will also be very asymmetric in its impact: The recession overwhelmingly impacted working class sectors with less academic educational attainment. Will the recovery now also leave them behind?

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