Dublin: Ireland’s labour market has not only recovered from the effects of the Covid-19 pandemic but is now performing at levels stronger than before, according to a new Department of Finance report. The study highlights a record-high employment rate last year, supported by increased participation of women and older workers who have traditionally been under-represented in the workforce. Immigration and stronger labour market engagement were also identified as key drivers of the recovery.
However, the report cautions that a decline in average working hours has tempered overall workforce growth, with remote working cited as a possible factor.
Between 1998 and 2009, average weekly working hours fell from around 37 to 32 hours — a drop of 13%. Hours gradually recovered after the economic downturn, with a 3.5% increase recorded between 2015 and 2019. By contrast, in other major European economies such as France, Germany, Italy, and Spain, average hours continued to fall during the same period.
The pandemic brought a sharper contraction, with working hours falling by over 7% in 2020. Despite the reopening of the economy, hours have yet to fully rebound and remain 7% below 2019 levels. This has meant that an additional 7% in employee numbers was required to maintain the same level of labour input. Nonetheless, total working hours grew by 10%, thanks to population growth and stronger workforce participation.
Finance Minister Welcomes Report
Finance Minister Paschal Donohoe welcomed the findings, noting that Ireland’s labour market is now more resilient than before the pandemic.
“We have achieved record employment levels for three consecutive years, brought unemployment below 5%, and seen the highest-ever participation of women in the workforce. This has been central to our recovery,” the minister said.
He also acknowledged external risks, particularly the potential impact of U.S. tariff policies under President Donald Trump, but expressed confidence that Ireland would adapt through alternative strategies.
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