One Island, Two Labour Markets

ABSTRACT:Since 1900, (what would become) the Republic of Ireland and Northern Ireland have constituted two distinct labour markets, with limited interaction between them, while both have been part of the wider Great Britain (GB) labour market. For much of this period there was significant emigration to GB from the island. From 1970, this pattern was reversed for the Republic of Ireland while, for Northern Ireland, emigration continued to be a drain on the economy. In that period, the integration of the island's labour markets into the GB labour market saw wage rates tend to converge. While wage rates were probably similar in Ireland and GB in 1922, relative rates first fell in the Free State from the mid-1930s. However, the resulting gap was closed by the early 1970s. Thereafter the rates were broadly aligned. For Northern Ireland, wage rates have been between 80% and 90% of GB rates since 1922.