Wage Inequality in Ireland’s “Celtic Tiger” Boom

Ireland offers a valuable case study of the evolution of wage inequality in a period of exceptional growth in output, employment and incomes from 1994 to 2007. We find that dispersion in hourly wages across all employees fell sharply to 2000, before increasing though much less sharply to 2007. Returns to both education and work experience declined considerably in the earlier period, while the increase in lower earnings relative to the median was associated with the introduction of the minimum wage in 2000, anchoring the bottom of the distribution subsequently. The more rapid increase in higher earnings in the latter part of the boom may be associated with the changing patterns of immigration and employment growth.