Dáil Éireann Debate, Tuesday - 17 January 2017
280. Deputy Noel Rock asked the Minister for Finance the gross income figure of workers and self-employed ##persons for 2015 and 2016 as compared to 2007, specifically detailing the top 10% of earners and bottom 10% of earners on a percentage change of income basis as per a document (details supplied) from 2014; and if he will make a statement on the matter. [1313/17]
View answerI understand that the data used in the document provided comes from the OECD Income Distribution Database (IDD) which is compiled using the EU-SILC survey and shows the change in gross labour income for the top and bottom 10% of the household, rather than the individual, income distribution from 2007 to 2014.
The income distribution is calculated for each year by ranking households based on their equivalised disposable income and then dividing them into ten equally sized groups, or deciles. Disposable income refers to the sum of market income received by all household members - gross earnings, self-employment income, capital income - , plus the current cash transfers received, less direct taxes paid, social security contributions and transfers to other households. Disposable household income is then adjusted for household size.
The income distribution is calculated for each year. As such the households in the top or bottom 10% of the distribution in 2007 are not necessarily the same households who are in the top or bottom 10% of the distribution in 2014.
Updated data that includes the gross labour income of workers and self-employed persons for 2015 will be made available as part of the 2015 EU SILC release which is expected in the first quarter of this year, while data for 2016 is expected to be available with the 2016 release, due in the first quarter of 2018.
The gross labour income data referenced by the Deputy does not take account of the impact of the tax or transfer system or other components of disposable income. The OECD IDD database also presents data on household disposable income which is arguably a more appropriate metric for comparing movements in income over time. For Ireland, this data shows a more modest decline of 14% in household disposable income for the bottom 10% of households and a decrease of 9% for the top 10% of households between 2007 and 2014.
The OECD data shows a significant decrease in the gross labour income earned by households in the bottom 10% of the household income distribution in Ireland between 2007 and 2014. This reflects, in part, the increase in the number of households with low or very low work intensity - so called "jobless households" - between 2007 and 2014.
A number of other countries also experienced significant reductions in the gross labour income earned by households in the bottom 10% of the household income distribution. Although not shown in the chart supplied by the Deputy, larger decreases are seen in data for Spain (69%), Greece (67%) and Portugal (57%), although again this does not take account of taxes and transfers in these countries.
