Key Indicators

The main indicators are summarised in Table 2.1 and are discussed more fully in what follows in this chapter. The first indicator is ‘work intensity’. This is measured at the household level as the ratio of the total number of months that all working-age adults in a household actually worked in the reference year to the total number of months the adults could theoretically have worked in that year. An adjustment is

made for part-time work (less than 35 hours), based on current hours worked4.

Someone working 17 hours per week, for example, is treated as working for half the relevant number of months. Work intensity can range from 0 (no working-age adult at

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work) to 100 per cent (all working-age adults worked full-time, full-year). Working- age, for this purpose, is defined as being between the ages of 18 and 59, excluding students under age 25. Adults aged 60 and over are excluded from consideration entirely (even if they live in a household with working-age persons and even if they have worked in the reference period). Children are assigned a work intensity score based on the working-age adults in the household. This means that the indicator is best suited to studying the work situation of individuals at the working life-cycle stage and their dependent children.

The strength of this indicator is that it allows us to examine work at the household level, allowing for the fact that parents, in particular, may manage their joint time allocation to paid work and unpaid caring work so as to maximise the wellbeing of household members.

Table 2.1 Key Work Indicators Relevant to Social Exclusion

Measure Base and Measurement

Work Intensity

Base population: Persons aged 0-59 in households with at least 1 working-age person (age 18-59, not a student under age 25);

Measure: Proportion of available person months over past year spent at work by working-age adults; adjusting for hours worked.

Excluded: adults age 60+; households with no working-age adults

Very Low Work Intensity (<20%) is a key social exclusion indicator.

Couple Work Pattern

Base: Couples;

Measure: Pattern of work (full-time, part-time), unemployment and activity in couples.

Excluded: Non-couples

In-work poverty (individual)

Base: Person aged 18-64 in employment5

Measure: Poverty status of persons of working age in employment

Excludes: Persons not of working age; persons not at work

Among the limitations of the work intensity indicator is the implicit assumption that all adults of working age are equally available for work. In other words, it takes no account of extra responsibilities that household members may fulfil, such as unpaid caring for children or people with a disability. Neither does it take account of the possibility that illness or severe disability may limit the capacity of some working-age adults to engage in paid work. Finally, another limitation as specified at the EU level,

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In order to have the work intensity and in-work poverty indicators calculated for the same adult population, we restrict the analysis of in-work poverty in this report to the population aged 18 to 59.

it is not defined for adults age 60 and over – despite the fact that the state pension age is currently 66 in Ireland and the age is set to rise over the coming decades.

‘Very low work intensity’ is a key indicator of social exclusion at the EU level. It is defined as being in a household with a work intensity level lower than 20 per cent of potential working time. Essentially, this is equivalent to a household where no adult has worked full-time or part-time for the duration of the reference period.

A closely related indicator, based on the EU Labour Force Survey rather than SILC data, is the share of people living in jobless households. Jobless households are defined as households where no member is in employment according to the ILO definition, excluding households comprised solely of students. Like the VLWI indicator, this is calculated for people aged 0 to 59 (European Commission, 2012). This indicator considers only current employment situation (not employment over the

entire year) and makes no adjustment for hours worked.6 We focus on the VLWI

indicator here as this has been adopted as an indicator of social exclusion for the purpose of target setting at the EU level (European Commission, 2010b).

The second indicator focuses on the division of labour between partners in couple households, distinguishing between full-time and part-time paid work, unemployment and being engaged in activities outside the labour market such as caring, housework or studying. As we shall see, there have been some very marked shifts in the work pattern of couple households since the start of the recession. This is a useful indicator for examining changes in the household division of labour, and the

consequences of these changes for household work intensity. Its limitations are that it focuses on couple households, thus excluding people living alone, lone parents or other multi-adult households.

The third indicator, ‘in-work poverty’, is calculated at the individual level for adults who are at work either full-time or part-time. The indicator captures being at work and, at the same time, being in a household at-risk-of-poverty. The at-risk-of-poverty indicator identifies individuals in households where the total income, adjusted for household size and composition, is below 60 per cent of median income across individuals. Being in-work-poor will depend on the hours worked and hourly earnings of the individual, but also on the sources of income of other adult household

members and on children in the household depending on the income. It is useful for examining the impact of low earnings or low hours worked on poverty. However, as

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noted in the previous chapter, it does have a number of significant limitations. It focuses only on those at work, who tend to be a select subset of the working-age population. It excludes those who are retired and those unable to work because of illness or disability. It focuses exclusively on income poverty, neglecting material deprivation. Finally, research has indicated that most of those with low wages are not found in poor households (Andress and Lohmann, 2008; Nolan et al., 2010).

For consistency with the work intensity indicator, we limit our attention to the

population aged 18 to 59. In addition, we base our measure of being ‘at work’ on the person’s current principal economic status, rather than their status over the previous 12 months. In these two respects, our measure differs from the EU in-work at-risk-of- poverty rate (European Commission, 2009).

In the following, we focus on the work intensity indicator and in this context we also examine how it relates to the work pattern in couple households. In the next chapter, where we discuss the relationship between work and poverty, we will discuss the in- work poverty indicator in more detail.