Jack Wall (Kildare South, Labour)
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Question 65: To ask the Minister for Finance if he will comment on recent labour market trends which show declining participation and increasing emigration; the impact that he expects these trends to have on the public finances in 2010 and 2011; and if he will make a statement on the matter. [17217/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Labour force participation rates have declined, falling by 1.7 per cent, year-on-year, in the fourth quarter of 2009. The decline was more pronounced for males, declining by 2.7 per cent, reflecting the strong decline in employment in the male-dominated construction sector and the challenges of re-skilling this group. We are working across Government departments to meet this challenge. Nonetheless, Ireland's overall labour participation rate remains high comparable to other EU member states and, in Q2 2009, was the third highest in the euro area.

The numbers of non-Irish nationals in the labour force is estimated to have declined by 33,600, or some ten per cent, in the year to the fourth quarter of 2009. A significant amount of this is due to outward migration. While no firm data are available, it is reasonable to assume, from anecdotal evidence, that there is also some outward migration of Irish nationals. As the Irish economy improves, and employment growth returns, I anticipate much of the short-term outward migration by Irish nationals will be reversed and in the more longer term, it is still reasonable to assume that, given our relatively high standard of living, we will be a source of attraction for non-Irish nationals as well.

Significant numbers are likely to leave the labour force this year due to net outward migration, with these numbers moderating in 2011 as the labour market recovers. Clearly this will have an impact on the public finances, with both the revenue and expenditure sides of the Government's balance sheet being affected. The demand for public services will also be affected by lower population growth. All these impacts have been factored into the fiscal projections of Budget 2010 and the data that has emerged since Budget time do not, at this stage, cause any revisions to the forecasts.