There is no agreed measure of living standards or wellbeing in economics, at least one that allows for an ironclad conclusion one way or the other.
That said, the latest comparative analysis of the island’s two economies, Northern Ireland and the Republic, published by the Economic and Social Research Institute (ESRI), is about as unequivocal as it gets. In nearly every metric worth considering – wages, disposable income, productivity, labour market participation, educational attainment, hospital waiting lists, life expectancy – there is a gap between the North and the South in favour of the Republic.
And it’s a gap that, in most cases, is growing.
The most commonly used metric to gauge living standards, and the one the OECD uses, is household disposable income controlled for prices. Using this measure, the study finds that, based on 2018 data, total disposable income was €5,400 higher in the Republic than in Northern Ireland, equating to an 18.3 per cent advantage after accounting for prices.
The Republic’s national income per capita in 2022 was 57 per cent higher than the North’s even when controlling for the State’s wonky GDP measure, reflecting what the report said was “stronger economic growth” south of the Border.
[ Stronger economic growth in Republic has positive ‘spillover’ in NorthOpens in new window ]
Labour productivity in Northern Ireland lagged behind that of the South in most sectors.
The Republic also had better education enrolment rates; lower shool dropout rates; and lower inpatient and outpatient waiting rates for those waiting more than six months.
Perhaps one of the most striking differences was in the area of life expectancy. A child born in the Republic in 2021 can expect to live two years longer than his or her Northern counterpart (82.4 years versus 80.4 years).
“Life expectancy is an important indicator that tends to encapsulate the impacts of multiple wellbeing determinants across a range of areas including income levels, educational attainment and access to health services,” the report noted.
There was one area that will perhaps leave citizens south of the Bordersomewhat disgruntled: tax. At a per capita level, individuals in Northern Ireland, on average, pay less than half the amount of personal income tax (€2,980) paid by their counterparts in the State (€6,725).
“This disparity suggests that higher average incomes in [the Republic of] Ireland, coupled with a more progressive tax system, results in a larger income tax share take,” the report stated, while noting that disposable (after-tax) incomes in the Republic were still higher.
People might quibble about the merits of a like-for-like comparison between the North and the Republic. One forms a regional part of the UK economy, the other is “national level” economy and an EU member state.
But you can’t get away from the conclusion that peace has not given Northern Ireland the expected economic lift many had predicted and that its economy has none of the dynamism that exists south of the Border.
