The Great Recession and the changing distribution of economic vulnerability by social class: The Irish case

Abstract

Ireland represents a particularly interesting case study of the distributional impact of pronounced macroeconomic fluctuations. In this article, we use the Irish case to show that in contrast to periods of relative equilibrium, an understanding of the distributional consequences of economic turbulence requires going beyond conventional measures of income poverty or inequality. Here, we focus on a conception of ‘economic vulnerability’ that identifies a sub-set of the population as characterized by a distinctive multi-dimensional risk profile in relation to income poverty, material deprivation and economic stress. Our analysis reveals a doubling of levels of economic vulnerability in the post-recession period. However, the degree of polarization between vulnerable and non-vulnerable classes was significantly reduced. Economic vulnerability is highly stratified by social class for both periods. Over time, the higher salariat, the non-agricultural self-employed, the semi-unskilled manual and those who never worked gained relative to the remaining classes. This provides support for the notion of ‘middle-class squeeze’. This was also true in relation to household work intensity. The impact of the latter on economic vulnerability declined sharply, while it came to play an increasing role in mediating the consequences of membership of the non-agricultural middle classes. Responding to the political pressures likely to be associated with ‘middle-class squeeze’ while sustaining the social welfare arrangements that have traditionally protected the economically vulnerable presents formidable challenges in terms of maintaining social cohesion and political legitimacy.