Multinomial Logit Estimates for All Workers for Model 1

There are 236,601 observations in this sample and Tables A3.6, A3.7 and A3.8 respectively (Appendix) report the key findings. Table A3.6 contains the associated marginal effects and T statistics from the multinomial logit regression based on model 1.

In accordance with Constant and Zimmermann (2003), gender is found to be a significant determinant of occupational attainment and this result holds across all occupations sampled. Relative to plant and machinery operatives, males are less likely to be found in clerical/administration (which is the strongest effect of all occupations at almost 30 percentage points less likely than plant and machinery occupations) and sales positions and are more likely to be occupying craft related (being the strongest positive effect at almost 20 percentage points), management, professional or associate professional/technical posts. This result is in line with the findings of Barrett et al.

(2006) where males in the Irish labour market were found to be more likely employed in the higher skilled management, associate professional or professional posts. One explanation as to why females appear to be penalised in terms of lower occupational attainment relative to males, is based upon a human capital acquisition argument. The contention is that females acquire less human capital over their careers, due to breaks taken for child caring duties. There are two schools of thought with respect to why this divergence in human capital levels between the genders occurs. Goldin and Polachek (1987) suggest that it is the women themselves who choose to acquire less human capital than men because they remain in the home caring for their children and

therefore choose to invest less in human capital acquisition prior to having a family, on the premise that children will disrupt their future careers. An alternative view is taken by Marini (1989), who argues that women are consistently channelled by educators and

34 Estimates were generated by STATA SE/8 and the software bases the robust standard errors calculations upon White‟s (1980) work.

employers into occupations predominately filled by females and that it is often the case that such occupations will require less skill and pay less. These arguments are

explored in greater detail in Section 4.2 of Chapter 4.

The nationality results presented in Table A3.6 are relative to the Irish workers in the sample, with the most striking result being that that all nationalities are less likely to obtain professional posts than the indigenous workers. Workers from the EU and the US are 2.8 percentage points and 1.7 percentage points respectively, less likely to be engaged in a professional post, when compared with the Irish cohort sampled. The EU result coupled with the fact that EU workers do not require a work permit to gain employment in Ireland, contradicts Minns‟ (2005) suggestion that immigrant workers fare poorly in the Irish labour market due to the negative impact of the permit system they face in seeking employment. The argument put forward by Barrett et al. (2006), that poor spoken English is a potential cause of immigrants‟ lower occupational attainment, may well be supported by the EU result, although no language variable or country breakdown is available to fully validate the argument. The language difficulty faced by immigrant workers in a host economy is a consistent theme throughout the occupational attainment literature: Stewart (1983) in examining the UK labour market;

Forrest and Johnston (2000) and Chiswick et al. (2003), who both utilise Australian data, reporting lower occupational attainment for immigrants who originate from economies with different language to their host economy. However, when the

professional occupation result for the US is examined the language barrier argument is inapplicable, but the work permit theory may hold. Finally, the US workers are just over 4 percentage points less likely to be employed in clerical work, relative to Irish workers, with the result statistically significant at the 10 % level only.

When the other occupational categories are examined, the language barrier argument of Barrett et al. (2006) may be supported. Workers from the UK, who by definition do not require a work permit but do speak English, are more likely to be employed in management (2 percentage points) and technical/associate professional (1.5 percentage points) posts, than Irish workers. However, when the same two occupational

categories are analysed for EU workers, who do not require a work permit but who may have poor spoken English, the EU workers are less likely to be employed in management (7.3 percentage points) and technical/associate professional (1.7 percentage points) jobs, relative to the Irish workers. However, it must be reiterated that unfortunately no language or country of origin variable in the context of the EU, is included in the estimations due to lack of data availability.

The results for „other‟ nationalities suggest that relative to the Irish workers sampled, this group of labour force participants are more likely to be involved in the occupations of security (4 percentage points), craft (6 percentage points) or sales related posts (1 percentage point), than the base category of plant and machinery operatives. This is consistent with what the Irish economy is experiencing at the moment with either low skilled workers migrating from the formally centrally planned economies of Eastern Europe or from Africa, or more highly skilled workers from these locations taking interim lower skilled posts. The logic as to why this phenomenon is occurring is twofold. Firstly, the impact of poor spoken English as suggested by Barrett et al.

(2006) in the context of migrants in the Irish economy is potentially applicable and secondly, Chiswick (1978a) contends that immigrants often experience lower

occupational success in a host country on arrival due to the imperfect transferability of labour market skills from country of origin to the host labour market. Finally in relation to nationality and occupational attainment, an interaction term comprised of gender and nationality was constructed³⁵. The results suggest that relative to Irish females, foreign born males are 2.5 percentage points more likely to be employed in a professional occupation and 3.8 percentage points less likely to be employed in a management role, than be employed in an occupation in the base category.

Other explanatory variables of interest examined include region, education, experience, age of the children of the worker, the tenure (e.g. permanent contract) of the worker and the hours worked by the individual. From a regional perspective, those workers

35 Interaction terms comprising of sector and nationality and sector and gender are also presented in Table A3.6.

based in the less affluent Border, Midland and Western regions relative to those living in Eastern and Southern regions, are more likely to be employed in the security (1 percentage point) or craft (3 percentage points) occupations than in the plant and machinery type occupations. Workers from the Border, Midland and Western regions are underrepresented in the higher skilled management (4 percentage points) and associate professional/technical (1 percentage point) occupations, relative to workers from Eastern and Southern regions of Ireland. As there is no variable to capture the effect of living/working in Dublin, one has to assume the Eastern/Southern impact upon occupational attainment, particularly in the higher skilled posts, is driven by the Dublin basin area and that the marginal effects are potentially underestimated as a result of the way this variable is constructed. Employment, investment and infrastructure in Ireland are so concentrated in the Dublin area that Government policies in this decade, such as the National Spatial Strategy of 2002 and the Government‟s decentralisation strategy of 2003, are solely aimed at generating

employment and investment in regions outside of the Dublin basin. In this context, it is not surprising that the Eastern and Southern regions appear to present better

employment opportunities, but the failure of the Government to implement the regional policies outlined above is potentially worrying. From a policy perspective, higher skilled posts need to be created outside of the Dublin region in order for all of Ireland to truly share in the „Celtic Tiger‟ success.

The educational category excluded from the estimations is third-level education, degree or higher. The results suggest that individuals who have attained an education level from primary through to third level certificates and diplomas, are more likely to be employed in a plant and machinery post than either a security, craft or sales job and are more likely to be in either technical or professional roles than in a plant and machinery post. The marginal effects in the case of the professional category increase

monotonically with the educational level attained by the individual, ranging from 2.5 percentage points for those individuals with primary education to 57 percentage points for those workers with third-level certificates and diplomas. This set of effects

highlights the returns to schooling with respect to occupational attainment: those with

higher educational levels are more likely to be employed in more professional roles, with the probability of employment in these occupations increasing with the education level of the individual. Similar impacts of schooling upon occupational attainment are also reported by Greenhalgh and Stewart (1985) for the UK, Constant and

Zimmermann (2003) for Germany and Barrett et al. (2006) for Ireland. Finally with respect to education, individuals who have achieved primary (3.2 percentage points), lower secondary (3.1 percentage points) or upper secondary (5.9 percentage points) levels of schooling are more likely to be employed in a clerical post than plant and machinery work, relative to those individuals who hold a degree or higher level of education.

The impact of the other measure of human capital included in the set of explanatory variables, experience (proxied by the year the individual started work), upon

occupation, accords with the previous findings in the area. Schmidt and Strauss (1975) in the case of the US and Nickell (1982) in the case of the UK, both found a positive relationship between the level of experience of an individual and their occupational status. Relative to those who started working in 2004, workers who commenced work prior to 2002 are more likely to be in a professional occupation than in a plant and machinery post, with the largest marginal effect (4.6 percentage points) reported for those workers with the most labour market experience. The same trend is evident when the results for management occupations are analysed, with individuals who commenced work prior to 2003 more likely to acquire management posts than work in a plant and machinery role, relative to those who started their careers in 2004, with again the largest marginal effect being reported for those who started work in 1960 or earlier. Interestingly, the highest marginal effect in this instance (28 percentage points) is six times larger than that reported in the case of professional workers, which may suggest experience has a larger role to play in management posts than in professional occupations. This can be potentially explained by people skills and experience accrued over time being rewarded in management posts.

Individuals are more likely to be employed as plant and machinery operatives than in clerical occupations, regardless of their level of experience, relative to those who started working in 2004. The same statement applies to security workers who commenced work prior to 2003, with both occupational categories reporting the highest marginal effect for those workers with the most experience. Employees who started working in 1960 or prior to that year are 49 percentage points less likely to be employed in security work than in a plant and machinery post, relative to those employees who started working in 2004. One potential explanation for such a high marginal effect in this instance is that the type of and conditions of work involved in this post are arguably more suited to a younger worker. Interaction terms combining experience and nationality were constructed with the most striking results linked to professional occupations. Relative to Irish workers who commenced work in 2004, foreign born workers who commenced work in 1997 are 5 percentage points more likely to be employed in a professional post than as a plant and machinery operative, with the corresponding effects for those foreign born workers who commenced work in 1995 and 1996 being 7 percentage points and 4 percentage points respectively. In general, the education and the experience findings support the positive role of human capital in occupational attainment.

Individuals sampled with children less than five years old, are 1 percentage point more likely to be in a professional occupation than in a plant and machinery post, relative to those individuals without children. The opposite is true of the lower skilled

occupational categories of security, craft and clerical work where individuals are less likely to be engaged in those occupations than in a plant and machinery post if they have children under the age of five. When the variable representing children aged between fifteen to twenty is examined, it is found that clerical and sales workers who have children in this age range are more likely to be employed in their current posts, than in a plant and machinery post, relative to those workers sampled who are not parents. The interpretation for the results of the „children‟ variables may rest with the effects of excessive child care costs in Ireland acting as a barrier to entry to the labour market for those employees in the lower paid occupations. Professional workers can

afford higher child care costs relative to the lower paid occupations and are therefore more likely to have a child and an occupation simultaneously. The lower paid clerical and sales workers may find it easier to enter the labour market when their children are past the age of fifteen and are no longer burdened with child care fees. Kennedy (2008) suggests that parents can expect to pay 20% of their income for child care costs, which is double the EU average, while successive Government Budgets since 2006 have allocated subsidies for workers with private child care fees.

In general, those workers in permanent posts are more likely to be engaged in lower skilled positions of security (3 percentage points), clerical (13 percentage points) and sales (3 percentage points) than in plant and machinery work, relative to those without a permanent post. Those without permanent posts are more likely to be employed in the skilled occupations of management (20 percentage points) and professional (1 percentage point) than in a plant and machinery occupation. This finding would tie in with the freedom of movement of human capital that is now the norm in the labour market. It would be anticipated that those employees with a greater skills base would have shorter termed, yet higher paid contracts than those working from a lower skills base.

The effect of hours worked each week by the individual is significant across all occupations, but all the marginal effects are very small, suggesting that differences in the length of the working week do not have a large influence upon occupational attainment. Individuals who have a second job are 5 percentage points more likely to be employed in a clerical role and 10 percentage points less likely to be in a

management occupation, than in a plant and machinery job, relative to those

individuals who do not have a second job. Clerical work by nature can often be part-time or flexipart-time and allows for the potential for a second job to be acquired, whereas management posts can often be more than the forty hour week, relative to clerical posts. Other explanatory and control variables such as age and sector of employment are included in the specification and year controls are included in all models.