ESRI Poverty Report – News and Events

Posted on: 05 September 2024

A report published today by the Economic and Social Research Institute (ESRI) and co-authored by Trinity economist Dr Barra Roantree has found thatIn Ireland, material deprivation among those under 18 increased from 17.7% in 2022 to 20.1% in 2023.

This means that an estimated 230,000 children are currently suffering from material deprivation: an increase of almost 30,000 since 2022. This increase comes against the backdrop of a 3% real (inflation-adjusted) decline in average disposable income of households with children.

Material deprivation is defined as the proportion of people in households who cannot afford two or more items from a list of ten essential items.

In contrast, material deprivation among those aged 65 and over fell from 11.7% to 9.8% over the same period. In this group, average real disposable income also increased by 3%, reflecting higher labour income and higher employment rates.

The report, Poverty, income inequality and living standards in Ireland: Fourth Annual Report, The study, published today in collaboration with Community Foundation Ireland, is based on the latest data from the CSO's Survey of Incomes and Living Conditions (SILC).

Other important findings include:

• After a decade of Despite uninterrupted growth, the average disposable income of the total population is lower than it was two years ago due to inflation. Adjusted for household size (equivalence-adjusted) income after taxes and transfers has fallen in real terms, both in mean and median terms: by 2.2% and 5.4% respectively between 2021 and 2022, so that average disposable household income is lower than in 2020.
• A notable exception to this decline in average disposable income is those aged 65 and over. While the average income after taxes and transfers fell by around 3% in real terms for those under 65, it rose by 3% for those over 65. Adjusted for household size and housing costs, the average disposable income of those over 65 is now higher than that of those under 65.
• When housing costs are taken into account, child poverty has increased in recent yearsAlthough the child poverty rate has fallen slightly before housing costs are taken into account, it has increased from 20% in 2020 to 22% in 2023 after housing costs are taken into account.
• People with low incomes or material disadvantages participate less in social lifeThey are less likely to have been formally or informally involved in volunteering or political activity in the past 12 months.
• Those who are materially disadvantaged have significantly fewer social contacts than other adults and significantly lower life satisfaction.
• The pandemic has had a negative impact on life satisfaction, civic participation and social contactsBy 2023, life satisfaction had still not recovered to the pre-pandemic level of 2018. Civic participation in 2022 was only half as high as in 2015. Social contacts also declined, but not to the same extent.

Dr. Barra RoantreeAssistant Professor of Economics at Trinity College and co-author of the report, said:

“The findings of this report suggest that additional policy measures – such as a second tier of child benefit targeted at low-income families – need to be considered if the government is to deliver on its commitments to reduce child poverty and material deprivation.”

Dr Helen RussellResearch Professor at ESRI and co-author of the report, said:

“Poverty has a depressing effect on social and civic participation. When people feel excluded from society and their voices are not heard, it undermines social trust and cohesion. It is important that the social infrastructure of disadvantaged communities is supported, for example through community development programs and investments in public facilities that promote social contact.”

Denise CharltonChief Executive of Community Foundation Ireland, which supported the research, added:

“Community Foundation Ireland has a network of 5,000 voluntary, community and charitable partners. The challenges identified in this research reflect the realities many people face on the ground every day and underline the importance of policy decisions that promote inclusion and equality for all.”