SECTION 1 : INTRODUCTION

An endemically high rate of unemployment has always been one of the most pressing problems facing policy makers in Ireland. Since 1980 the unemployment rate has risen inexorably, as illustrated in Figure 1. Furthermore, on the basis of the most recent medium-term projections to 1990 (Bacon (1986)), the unemployment rate is set to continue to rise, albeit at a much slower rate, to over 18 per cent of the labour force. This more recent rise in unemployment is, of course, a phenomenon not confined to Ireland, but shared, in one form or another, by many other European economies.

All political groups in Ireland place great emphasis on their policies to alleviate unemployment. The extent of direct state intervention in the Irish labour market can be seen clearly from Figure 2. Employment in the sheltered marketed services sector grew over the period 1973-83 by 18.4 percent (56900), while employment in the non-market sector (public administration and other non-marketed services) grew by 40.2 percent (68700). While industrial employment remained relatively stagnant, displaying cyclical highs in 1974 and 1980, agricultural employment declined steadily. Over the same period, the labour force grew by 17.7 percent (196900) and migration abroad, having declined from a net outflow of about 60000 per annum in 1959 to a zero net flow by 1970, became a net inflow during the years of 1973-78, but has returned to a net outflow since 1983 (Figure 3).