Dr. Paul Redmond:

I will respond to the Senator's question on minimum wage in a moment, but I will first add to what my colleague said. The ESRI did work recently on how men and women select jobs and what characteristics they prefer. I use the word "preference", but preferences can be shaped by discrimination and other factors and so on. We found that men are far more likely to say that they chose a job because of pay, whereas women are far more likely to say they chose a job because it was close to home or it was flexible. What one finds is that there is a trade-off, which we call a compensating differential. Women who are highly educated and could command a high wage seem to trade off a higher salary for increased flexibility. That is a major factor in terms of the remaining gender wage gap, and addressing that is a key issue. It has been described by some as the final chapter in achieving gender wage equality. How does one address this? There is scope for policy to do that. When compared with other EU countries, it is particularly strong in Ireland. Women seem to make this trade-off in terms of flexibility and pay.

The question on hours and the minimum wage is very interesting and it is something about which we think a lot. The ESRI has done a large body of work on the effect of minimum wage increases on employment. We found that while one does not really see jobs losses, one tends to see a reduction in hours. A key question is why that is. Where is that coming from? There are two possibilities. It could be that employers are cutting the hours of employees in response to higher wages. It could also be the case, as Senator Pauline O'Reilly said, that if someone is earning higher wages, he or she may decide to work less so as to spend time with his or her family and so on. It is hard to disentangle these effects and it is likely a combination of the two.

There has been research in the UK which would suggest that it generally might come from employers cutting wages. Conversely, we also found some evidence in Ireland to say there is an increase in voluntary part-time work, which would suggest that it is at least partly coming in response to workers themselves. If that is the case then it is not really a concern because we are not generating adverse employment effects in that regard.