Understanding Income Inequality in Ireland

Abstract

This paper shows that inequality in disposable income has fallen substantially in Ireland between 1987 and 2017. However, inequality in market income has risen on most measures over the same period, leaving Ireland the most unequal country in the EU in terms of income before taxes, benefits and pensions. While benefit and pension payments do most to reduce the absolute level of inequality, it is Ireland’s highly progressive tax system that does most to reduce inequality relative to other EU countries, leaving us with a level of income inequality that is very close to the EU average.