This report is the fifth from an Economic and Social Research Institute (ESRI) research programme in partnership with Community Foundation Ireland, which seeks to address gaps in our knowledge and understanding of poverty, income inequality and living standards in Ireland.

The key findings of this year’s report are as follows:

Income growth and inequality

• Average incomes – adjusted for household size and inflation – fell by 0.6 per cent in the year to 2023, leaving them 3.3 per cent below their 2021 level. This is despite growth of 11.3 per cent in nominal income over that period, which has been counteracted by faster growth in prices: 14.6 per cent for the average household.
• Inflation has been even higher for lower-income households, a result of light, heat and groceries making up a larger share of their total expenditure. We estimate that recent inflation has been 8 per cent higher than the headline rate for the lowest-income fifth of households and 5 per cent lower than the headline rate for the highest-income fifth of households. This – combined with patterns of nominal income growth – has led to incomes stagnating at all but the middle of the distribution.
• These patterns of growth have led to a decline in most measures of income inequality, but a rise in the gap between the bottom and the middle. While both the Gini coefficient and top decile share fell in the latest year of data, the 50:10 ratio increased slightly.
• All these measures of income inequality have fallen substantially over the longer three-and-a-half-decade horizon covered by our data. However, the decline in measures of expenditure inequality – which may provide a better measure of longer-run living standards – is less pronounced. For example, data which contain information on both show the Gini coefficient for income has declined from 0.329 to 0.303 between 2009–10 and 2022–23, while that for non-durable expenditure has only fallen from 0.259 to 0.247.

Poverty and material deprivation

• Overall, rates of income poverty and material deprivation have not changed significantly in the most recent year of data. The before housing costs (BHC) at-risk-of-poverty rate for incomes in 2023 was 12 per cent: similar to that for incomes in 2022 (11 per cent) and 2021 (13 per cent). There has also been very little change in the rate of income poverty after housing costs (AHC) or the rate of material deprivation, which both remain around 15 per cent.
• Rates of income poverty and material deprivation for children have remained persistently high. The latest data show that one in five (c.225,000) children are below the poverty line when housing costs are accounted for: little different from the share seen during the worst years of the financial crisis. This suggests no real progress in reducing levels of child poverty despite such reductions forming a key goal of policy over this time. Ireland also performs poorly in comparison to other EU countries in terms of rates of AHC income poverty for children, ranking 16th out of 27 countries.
• Measures of overall poverty based on expenditure rather than income have changed little over the last decade-and-a-half. For example, the poverty rate based on total expenditure was 16.7 per cent in 2022–23 compared to 16.2 per cent in 2015–16 and 16.6 per cent in 2009–10. Similarly, the poverty rate based on non-durable, nonhousing expenditure stood at 19.5 per cent in 2022–23 compared to 19.7 per cent in 2015–16 and 20.2 per cent in 2009–10.  

Intergenerational poverty

• This year, a thematic chapter explores the link between childhood poverty and adult outcomes, including poverty, material deprivation and health. This analysis is based on retrospective questions asked in a special module in the Survey on Income and Living Conditions in 2011, 2019, and 2023.
• After taking educational, labour market differences and other characteristics into account, people aged 25–59 who grew up in poverty are 8 percentage points more likely to be in bad health and 15 percentage points more likely to be deprived compared to those who grew up in good or very good conditions. Similarly, those who grew up poor are 3 percentage points more likely to be unemployed or inactive.
• Reducing the intergenerational transmission of poverty requires narrowing the educational attainment gap between those who grew up in financially disadvantaged versus advantaged households. Improving access to healthcare for children from low-income households is also essential, as poor health in childhood can undermine both educational achievement and future employment prospects.