Northern Ireland disposable incomes lower than Republic, says study

Household disposable incomes in Northern Ireland are lower than in the Republic of Ireland, a study has suggested.

A report by the Economic and Social Research Institute (ESRI) and the Department of the Taoiseach’s Shared Island Unit has compared the two economies.

The report recognises structural differences make it difficult to compare the economies, including Northern Ireland being a regional economy and the “significant” impact of the Troubles.

Based on 2018 data, it said disposable income per household was €5,400 (£4,656) or 18.3% higher in the Republic of Ireland than in Northern Ireland and that gap has widened over time.

The report said unemployment levels in Northern Ireland were lower than in the Republic in 2023.

But employment levels were also lower in Northern Ireland, which the report suggested could lead to future and ongoing skills shortages.

The report said wages in the Republic were higher, with hourly earnings 36% higher than in Northern Ireland in 2022 (when adjusted for purchasing power parity).

It also said people in Northern Ireland, on average, pay less than half the amount of personal income tax compared to their counterparts in the Republic.

There has been an increase in trade activity between the two economies, the report said Brexit is likely a “driving factor”.

However, the report also found the performance of the Irish economy was much more prone to negative external shocks compared to Northern Ireland.

A comparison was also made of wellbeing outcomes across education and health.

It was found that the Republic had fewer young people leave school early, a lower infant mortality rate and fewer people on a waiting list for longer durations.

The report said there were 86 people per 1,000 population on waiting lists for more than 18 months in Northern Ireland, compared to 12 people per 1,000 in the Republic of Ireland.

In Northern Ireland, the school enrolment rate among 15–19 year olds was 71% in 2022, compared to the UK average of 81% and 92% in Ireland.

This report said the fact that almost 30% of young people aged 15–19 in Northern Ireland were not enrolled in education, alongside the enrolment rate falling between 2018 and 2022, was “extremely alarming”.

It also found average life expectancy in Northern Ireland is 80.4 years, compared to 82.4 years in the Republic.

The report said this reflects a “growing divergence over time” in areas such as living standards, education and certain aspects of health care access.

The population in the Republic was 2.5 times that of Northern Ireland in 2022 and was growing at a faster rate from 2010-2022, which the report said was partly due to immigration.

It also highlighted the fact that Northern Ireland had an older population, which was more likely to put pressure on social welfare systems.