Introduction

The recent economic crisis hit Ireland hard. Its economic contraction generated sharp increases in unemployment and underemployment. Policy efforts to respond to the unemployment challenge were heavily impacted by both the lack of resources at a time of fiscal crisis and the overriding aim of fiscal consolidation. Moreover, changes to labour market policies have been guided by the idea, promoted by both domestic and international policy actors, that Ireland's policy regime prior to the crisis was no longer ‘fit for purpose’, being overly focused on a passive benefit system and a similarly passive approach to activation. Judged against Ireland's typically conservative and slow pace of reform, a period of deep austerity between late 2008 and 2014 instigated rapid and potentially transformative labour market policy (LMP) changes. By 2016, the government framed a new policy phase, ‘activation in a time of recovery and growth’ (Government of Ireland, 2016: 4); however, several issues remain problematic in terms of both the changes instigated and the legacies of the crisis.

In this chapter, three core changes related to consolidation and catch-up are identified. First, retrenchment is clearly evident across the social protection system in payments to those of working age. Moreover, retrenchment is occurring in a system in which the social insurance principle is already weak. Social assistance features strongly and several categories of means-tested payments add complexity. There is no distinction between social insurance and social assistance schemes in terms of benefit rates and a flat-rate system operates. In contrast to many other Organisation for Economic Co-operation and Development (OECD) countries, the labour market is less dualistic, with little difference in the termination costs of permanent and of temporary staff (OECD, 2014a). Changes made over the crisis period have therefore further eroded the security attached to social protection in the context of cuts and curtailments of all working-age programmes.

Second, in terms of activation, existing programmes that focused heavily on direct job creation have been somewhat curtailed and new, more market-oriented, programmes have been introduced. The simultaneous pursuit of cost containment has been borne by participants via diminished benefits and tighter eligibility requirements. Compulsion has also been strengthened, though distinctions remain in terms of which groups are activated and how.