This publication analyses the impact selected COVID-19 income support schemes had on the earnings of employees in Ireland in the first three quarters of 2020. Employee earnings data was combined with data on selected COVID-19 income support payments made to employees who have either lost their employment due to COVID-19 or have remained linked to their employer and received COVID-19 income supports payments via their employer. This enabled the calculation of earnings and selected COVID-19 income supports income statistics at an employee level.

Employee earnings and employee income are defined in this report as:

Employee earnings = employment earnings of employees

Employee income = employment earnings of employees plus COVID-19 income supports

Employees were categorised into groups based on whether they were Recipients or Non-Recipients of selected COVID-19 income supports. By examining employee income of both Recipients and Non-Recipients of income support, this report illustrates the impact the pandemic and various COVID-19 income supports had on employee income.

When comparing employment earnings of all employees with employee income (employment earnings plus selected COVID-19 income supports) it must be noted that if an employee who did not receive COVID-19 income support lost their employment, then it is likely they would have been eligible to apply for Job Seekers Benefit or Assistance from the Department of Social Protection (DSP). This scenario is not examined in this report.

A panel approach was taken in section 1 of the analysis to measure the trends in the earnings and COVID-19 income supports of a fixed group of employees over the whole period. A cohort approach was taken in sections 2 and 3, where the earnings and COVID-19 income supports in each quarter of 2020 were compared to the same quarter in the previous year. Using these approaches limits the analysis to those employees who are present in the relevant quarters and removes the compositional effect of people moving in and out of employment, which can distort underlying trends in earnings.

Section 1: Panel Analysis of Recipient and Non-Recipient Employees present in all Quarters Q1 2019 to Q3 2020

Over the period Q1 2019 to Q3 2020 employees who received COVID-19 income supports had lower median income when compared to employees who did not receive these supports. This gap in median weekly income between Recipient and Non-Recipient employees has widened since the onset of the COVID-19 pandemic, see Figure 3.1.

Figure 3.1 is based on employees who had employee earnings or support income in all quarters in the period Q1 2019 to Q3 2020. Employees were categorised into three distinct groups:

• Non-Recipients of COVID-19 income supports
• Recipients of COVID-19 income supports in Q2 2020 but not in Q3 2020
• Recipients who received support payments in both Q2 and Q3 2020

Median weekly earnings of Non-Recipient employees increased from €799 to €857 between Q1 2019 and Q2 2020 before falling slightly to €853 in Q3 2020. This resulted in an increase in the median weekly income for these employees of 5.2% in the year to Q2 2020 and of 5.4% in the year to Q3 2020.

Median weekly income of employees who received supports in Q2 2020 but not in Q3 2020, fell 11.0% in Q2 2020 but increased by 17.3% in Q3 2020, as the economy began to re-open and employees returned to work. The median weekly income of these employees was 9.7% lower in Q2 2020 than in the same quarter the previous year, and was 4.2% higher in Q3 2020 compared to Q3 2019.

The median weekly income of employees who were Recipients in both Q2 and Q3 2020 rose from €450 in Q1 2019 to €489 in Q4 2019. This median then dropped to €468 in Q1 2020 and fell again to €391 in Q2 2020 before a small increase to €414 in Q3 2020. Thus, the median weekly income of these employees in Q3 2020 was 13.2% below the median in Q3 2019. See Table 3.1 and Figure 3.1

Section 2: Matched Cohort Analysis of COVID-19 Income Support Recipients and Non-Recipients

Median weekly income grew in the year to Q1 2020 for both Recipients (+4.0%) and Non-Recipients (+5.3%). However, the start of the pandemic saw median weekly income fall by 13.9% in the year to Q2 2020 for Recipients compared with a rise of 4.7% for Non-Recipients. In the year to Q3 2020, the median weekly income of Recipients dropped by 12.0% compared with an increase of 5.0% for Non-Recipients. See Table 3.2 and Figure 3.2

This section compares trends in the weekly income of employees who did and did not receive COVID-19 income supports (Recipients and Non-Recipients).  A matched cohort approach was taken which restricted the analysis to employees who received either earnings or income support in both the reference quarter and the same quarter of the previous year. Employee earnings and COVID-19 income support payments were added to calculate median income statistics for Recipient employees.

Median weekly income of male employees who received COVID-19 supports was more negatively impacted by the pandemic compared with females. Male employees had a drop of 18.6% in median weekly income in the year to Q2 2020, compared with a fall of 5.0% for females. In the year to Q3 2020, the median for males fell by 13.4% compared with a drop of 6.3% for females. See Table 3.2 and Figure 3.3

Those employees aged Under 25 who received supports saw their median weekly income increase by 16.0% and 9.5% in the year to Q2 2020 and Q3 2020, respectively. This compared with falls of 18.2% and 14.8% for those aged 25 and over. See Table 3.2

Employees who did not receive COVID-19 payments had annual income growth in all regions in the year to Q3 2020, compared with decreases in all regions for employees who did receive the income supports. There were increases of 5.9% in median weekly earnings for employees in Dublin in the year to Q3 2020 who did not receive COVID-19 payments. In contrast, employees in Dublin who did receive COVID-19 payments had a decrease of 15.6% in median weekly income in the year to Q3 2020, followed by employees in the Mid-East with a drop of 12.8%. See Table 3.2 and Figure 3.4

All counties had a drop in the median weekly income for employees in receipt of COVID-19 income supports in the year to Q3 2020.  These decreases ranged from a fall of 15.6% in Dublin to a drop of 3.7% in Donegal. See Table 3.3 and Figure 3.5

Employees were divided into 5 equal sized groups (or quintiles) based upon their income in each quarter of 2019. The lowest 20% of earners were in the first quintile, the next 20% of earners were in the second quintile and so on. The median weekly income of Recipient and Non-Recipient employees in each quintile was measured in each quarter in 2019 and was compared to the median weekly income of the same employees in the same quarter in 2020.

Employees in the bottom or first income quintile in Q2 2019 who were Recipients had a 55.6% increase in median weekly income in the year to Q2 2020, compared with a rise of 18.3% for Non-Recipient employees.

The median weekly income of Recipient employees in the first income quintile in Q3 2019 increased by 35.4% in the year to Q3 2020. Recipients in all other quintiles had falls in median weekly income in the year to Q3 2020, with the largest fall of 22.7% for the highest earners in the fifth quintile.

The median weekly income for Non-Recipients increased in all quintiles in the year to Q3 2020. The largest increase of 21.6% was for those in the first quintile, while the smallest increase was 1.9% for the fifth quintile. See Table 3.4 and Figure 3.6

Additional analysis showed that the growth in the median weekly income of Non-Recipient employees in the first quintile was due to increased earnings primarily in the younger age groups and in the retail and wholesale sectors.

 

Section 3: Matched Cohort Analysis of Employee Income including and excluding COVID-19 Support Income

This section compares employment earnings of all employees, with employee income defined as employment earnings plus selected COVID-19 income supports. This analysis aims to quantify the impact COVID-19 income supports had in supporting employee income in the first three quarters of 2020. It explores the hypothetical situation of how median earnings would have been affected if no supports were available to employees and compares it with the actual situation where employees availed of COVID-19 income supports in addition to their employment earnings. If COVID-19 income supports were not available, it is likely that employees who lost their employment due to the COVID-19 pandemic would have been eligible to apply for DSP Job Seekers Benefit or Assistance. This analysis does not take account of this scenario.

Median weekly earnings fell significantly in the years to Q2 2020 and Q3 2020 because of the COVID-19 restrictions introduced at the end of Q1 2020. When COVID-19 income supports are included, median weekly income also dropped in the years to Q2 2020 and Q3 2020, but to a smaller extent, illustrating how employee incomes were supported.

The median weekly earnings of all employees fell by 15.0% in the year to Q2 2020, compared with a drop of 6.5% in median weekly income, (which includes COVID-19 income supports). In the year to Q3 2020, median weekly earnings decreased by 5.7%, while median weekly income fell by only 0.9%. See Table 3.5 and Figure 3.7

Employees aged under 25 were more likely to have a drop in median weekly earnings. In the year to Q3 2020, median weekly earnings for employees aged under 25 fell by 22.0% compared with a drop of 5.4% for employees aged 25 and over. However, when income supports are included, median weekly income for employees aged under 25 rose by 3.2% in the year to Q3 2020 compared with a drop of 2.1% for employees aged 25 and over. See Table 3.5 and Figure 3.8

The share of employees earning Less than €300 a week, excluding income supports, rose from 16.1% of employees in Q2 2019 to 33.6% in Q2 2020, an increase of 17.5 percentage points. Some employees earned less, bringing them into the earnings band of Less than €300, while others lost their employment and so had no earnings, and were also included in this lowest earnings band. When COVID-19 income supports were included, the share of employees with an income of Less than €300 dropped by 8.3 percentage points in the year to Q2 2020, to 7.8% of all employees, as employee income moved over the earnings threshold into the higher earnings band. See Figure 3.9 which illustrates the share of employees in the different earnings bands, both with and without selected COVID-19 income supports.

A similar trend can be seen in the period Q3 2019 to Q3 2020, when the share of employees earning Less than €300 rose by 11.3 percentage points when COVID-19 supports were excluded, increasing from 16.2% to 27.5% of employees. However, when these supports were included, the share of employees with an income of Less than €300 fell by 3.9 percentage points in the year to Q3 2020, to 12.3% of employees. The income supports moved employees into the higher earnings band and the share of employees in the €300 to €500 band increased to 25.5% in the year. See Table 3.6 and Figure 3.9.

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