Professor Seamus McGuinness:

Our childcare costs are among the highest in the EU, so it is not surprising to see that we have more people inactive on home duties. They tend to be more predominantly female because they are the ones who have to make those choices. What we do find is that, in terms of inactivity, the elasticity of labour supply is broadly similar, so if there is growth in wage rates in the Republic, it pays more people to work and they will tend to come out of inactivity and into employment. What we see is that the sensitivity of inactivity to changes in wage rates is the same in both regions. We had expected it to be less sensitive in the North. One of the solutions to those intergenerational issues that lead to more inactive people being on disability or sick is wage growth. We tested it and we found that if there is wage growth in the North's economy, people who are inactive, sick or disabled are very sensitive to that and more likely to come back into the labour market. If there is wage growth, if there are opportunities to generate good incomes, that is a partial solution. We will not get everyone back - many people cannot come back - but at least some of the workers who are inactive will come back into the labour market. That is pretty much what our forthcoming analysis shows.