ANALYSIS: Under-25s account for 43 per cent of the decline in employment

IT DID not come as a surprise to those of us who closely monitor economic data that net migration was negative in the 12 months to April, since the Central Statistics Office’s labour-force estimates for the first quarter of the year, published in June, already implied as much.

Still, the resumption of net outward migration is something of a watershed after 13 successive years in which the opposite was the case. The net outflow of 8,000 comprises an estimated 65,000 emigrants (the biggest figure since 1989) and 57,000 immigrants (the smallest since 2000). It compares with net inflows of 39,000 in 2008 and 67,000 in 2007.

This turnaround is mainly due to the behaviour of nationals of the EU12 (the 10 countries that joined the EU in May 2004 plus the two most recent member states). There was a net outward movement of 17,000 in EU12 nationals in the period to April 2009, compared with a net inward movement of 38,000 two years previously. By comparison, there was little change over this period in respect of people of Irish nationality: zero net migration in the 12 months to last April; modest net inflows of 7,000 and 3,000 in the previous two years.

Despite net outward migration, the total population increased again, albeit at a much slower rate (0.8 per cent) than in previous years (an annual average of 1.8 per cent between 2004 and 2008). This is due to a sizeable natural increase, itself a reflection of an exceptionally buoyant birth rate, the number of births being the largest since 1896.

The detailed estimates reveal small but potentially significant changes in population structure.

The number in the most economically active age range (20 to 65) is flatlining and will fall if, as seems likely, net outward migration gathers momentum.

But the numbers in the younger and post-retirement cohorts are rising steadily, signalling a rise in the age dependency rate for the first time in two decades.

Yesterday's Quarterly National Household Surveydata confirms that employment contracted and unemployment rose a good deal further in the second quarter of the year. The pace of employment decline in the quarter was 1.8 per cent, seasonally adjusted. This is about half the rate of decline recorded in the first quarter and chimes with the general view that things continued to deteriorate in the more recent period but at a milder rate.

At a sectoral level, the pace of contraction remained greatest in construction (down 13 per cent on the previous quarter), but substantial employment losses were also recorded by manufacturing and agriculture.

Encouragingly, several sectors posted modest employment gains, including transport and storage, accommodation and food, and financial services.

The data exposes as a myth the notion that this is a middle-class recession – at least as far as the labour market is concerned. Employment losses have been heavily concentrated among craft workers and the semiskilled and unskilled. Across the relevant occupational categories, employment in the second quarter was 14 to 25 per cent below its year-earlier level.

By contrast, the rates of employment loss among professional, managerial and technical grades are estimated at 1 to 3 per cent.

There have been marked differences in experience across levels of educational attainment. Among those with no more than the equivalent of a Junior Cert, employment has fallen by 20 per cent, while employment of third-level graduates has increased marginally.

The loss of employment has also been much greater among the young compared with the old and middle-aged. The numbers employed in the 15 to 24 age range in the second quarter was 26 per cent lower than in the same period of 2008, while the equivalent rate of employment loss among those aged 25-plus was just over 5 per cent. Thus the under-25s account for 43 per cent of the decline in employment over this period despite accounting for only 11 per cent of total employment. This is a remarkable (but largely unremarked on) feature of the recession.

Employment loss among the young has not been matched by an equivalent increase in unemployment. Instead, labour- force participation rates for these cohorts have fallen quite sharply, signifying, one presumes, a rise in participation in education.

Among young people who stay in the labour force, unemployment rates are shockingly high: 40 per cent for 15- to 19-year-old males; 32 per cent for 15- to 19-year-old females; and 30 per cent for 20- to 24-year-old males.

Another development is the increased incidence of part-time work. Whereas the total number of people at work fell by 8.2 per cent in the 12 months to the end of the second quarter, the number working part time rose by 4 per cent. A consequence of the increased incidence of part-time employment is a sizeable reduction in average hours worked, which fell by 2.5 per cent between the second quarter of 2008 and the second quarter of 2009. Combined with the drop in the numbers at work, this means the total volume of work available in the economy declined by 10.5 per cent over this period.