Earnings Analysis using Administrative Data Sources 2021

Wage Subsidy Schemes (WSS)

Earnings of certain employments impacted by the COVID-19 pandemic were supported by the Temporary Wage Subsidy Scheme (TWSS) which operated in two phases, a transitional phase from 26 March to 03 May 2020 and an operational phase from 04 May to 31 August 2020, and the Employment Wage Subsidy Scheme (EWSS) which replaced the TWSS and became operational from 01 September 2020.

The COVID-19 Pandemic Unemployment Payment (PUP) scheme, which was administered by the Department of Social Protection (DSP), provided a social welfare payment to those who lost their employment because of the COVID-19 crisis. Any payments related to the PUP scheme are not included in this analysis. Such payments were paid by DSP to a person who had lost income from employment and where no attachment in the form of an employment contract was maintained between the employer and employee.

Employments Supported by WSS

At some point in 2021, the Wage Subsidy Schemes (WSS: TWSS or EWSS) directly supported 20.0% of employments which were active in October 2021. The proportion of employments supported varied significantly across the different sectors of the economy. The sectors with the highest proportion of employments supported were Accommodation & Food Services (78.1%), Arts, Entertainment, Recreation & Other Service activities (50.0%), Transportation & Storage (33.3%), and Construction (31.7%). See Table 2.1 and Figure 2.1.

WSS Payments as a Proportion of Total Earnings

WSS payments accounted for 4.4% of total earnings across all employments. Again, this varied across economic sectors. The sectors where WSS payments represented the highest proportion of earnings were Accommodation & Food Services (47.6%), Arts, Entertainment, Recreation & Other Service activities (20.2%), Transportation & Storage (10.4%), and Construction (7.5%). See Table 2.2 and Figure 2.2.

Impact of WSS on Change in Earnings

With WSS supports included in earnings, where applicable, median weekly earnings increased by 2.4% between 2020 and 2021. When WSS supports are excluded from employee earnings in both years median weekly earnings increased by 4.0%.

The difference in the change in earnings with WSS payments included or excluded varies across sectors. With WSS payments included in earnings, all sectors showed an increase in median weekly earnings. When WSS payments are excluded median weekly earnings decreased in two of the 13 sectors.

In the Accommodation & Food Services sector median weekly earnings increased by 4.0% when WSS payments are included in earnings, compared to a decrease of 40.9% when WSS payments are excluded. The sector with the second largest difference is Arts, Entertainment, Recreation & Other Service activities where median weekly earnings increased by 4.9% when WSS payments are included in earnings, compared to a decrease of 12.1% when WSS payments are excluded. See Figure 2.3 and Table 2.3.

Change in Employment and Earnings, 2020-2021

When considering the change in earnings between 2020 and 2021, it should be noted that there may be a compositional effect due to the significant changes in the number of active employments in certain sectors between the two years. The composition of the labour market in 2021 was very different to previous years. The changes in average weekly earnings in any sector may be impacted to some degree by those employments that have left/joined the sector having lower/higher average earnings than those employments that remained in the sector in the years being analysed.

Comparing 2020 and 2021, the number of active employments increased by 8.2%, with all 13 economic sectors showing increases. The largest increases were recorded in the Accommodation & Food Services Activities sector (31.2%), followed by the Professional, Scientific & Technical Activities sector (14.9%). See Table 2.6.

Between 2020 and 2021, median weekly earnings increased by 2.4% across all employments, with all economic sectors showing increases. The largest rate of increase was recorded in the Information & Communication sector (6.7%) followed by the Construction sector at 5.4%. See Table 2.6.

Note: An active employment is one that was active in October of the reference year. Earnings included in this analysis are gross earnings, before deductions such as income tax, and include any taxable benefit in kind. Unless otherwise stated earnings included in this analysis are inclusive of WSS where applicable.

Analysis of Employments that were active in both 2020 and 2021

To provide further context, and taking into consideration the compositional effect mentioned above, an analysis of earnings for employments that were active in both 2020 and 2021 was prepared and is presented below. For each year, a matched dataset was created of all employments that were active in October of both years.

For employments that were active in October 2020, 75.9% were also active in October 2021. The proportion of employments active in both years varied by sector. The sector with the highest proportion of employments active in both years was Public Administration & Defence (88.4%), while the sector with the lowest proportion was the Accommodation & Food Services sector (57.1%).

For employments that were active in both 2020 and 2021, median weekly earnings increased by 7.1%. Median weekly earnings increased in all the 13 economic sectors between 2020 and 2021. The largest rates of increase were recorded in the Accommodation & Food Services sector (14.1%) and the Information & Communication sector (12.0%). See Table 2.7.