Households affected by disability saw stronger income growth
Households affected by disability experienced stronger income growth between over 12 years than households not affected by disability, according to new research by the ESRI.
Households in which one or more people was affected by disability experienced growth in their disposable – after tax and social welfare – income of 21%, on average, between 2007 and 2019.
Households in which no one was affected by disability saw income gains of 5% on average.
The larger income growth experienced by households affected by disability is explained by their labour market earnings.
The average wage of workers with a disability grew by 51% between 2007 and 2019 while wage growth for those without a disability was 37%.
Despite this rapid wage growth, in 2019, the average wage of workers with a disability, at 21.60 euro per hour, was still 16% lower than the average wage of workers without a disability, at 25.70 euro per hour.
Households affected by disability also increased their work intensity, according to the ESRI research.
While the employment rates and usual hours worked per week of individuals with a disability has been stable since 2007, the employment rate and hours worked by their family members has increased.
These developments resulted in faster earnings growth of households affected by disability between 2007 and 2019 compared to households not affected by disability.
While social welfare payment rates have increased in nominal terms between 2007 and 2019, they have not kept pace with earnings growth, partly due to nominal cuts and freezes during the austerity period.
Karina Doorley, an author of the report and senior research officer at the ESRI, said: “This research builds on previous equality budgeting work by the ESRI which showed that real benefit cuts during the austerity period affected women more than men.
“Assessing the impact of future policy changes along equality dimensions such as gender and disability is an important step to reducing income inequality in Ireland.”
Mark Regan, an author of the report and research analyst at the ESRI, said: “In 2019, Disability Allowance was the third largest social welfare scheme by expenditure.
“Individuals affected by disability are sensitive to changes or freezes to social welfare rates.
“From 2007 to 2019, welfare rates did not keep up with earnings growth. This meant that households affected by disability faced income losses of 7.5 per cent relative to a counterfactual where these rates grew in line with earnings.”