ECONOMICS: Statistics do not back up the doom and gloom scenario supposedly playing out in Ireland

THE IRISH economy is still in the depths of the most severe recession in over a generation and experiencing austerity on a scale that surpasses the measures being imposed on other troubled European economies.

It is not surprising that these hardships have been accompanied by a steady stream of headlines suggesting that the population’s broader wellbeing is being undermined and that we are collectively in a deep trough of despondency. Almost daily, stories appear linking manifestations of social and psychological stress to the recession.

It is therefore timely to attempt a systematic review of the evidence on how the Irish people are bearing up in the present bleak economic landscape.

Despite our woes, Ireland continues to rank high in international quality of life league tables. The 2010 Gallup World Poll placed us 10th out of 40 advanced countries in terms of life satisfaction and 12th in terms of day-to-day happiness.

The EU Survey on Income and Living Conditions showed 79 per cent of the Irish population aged 18 and over reported themselves in 2010 to have been happy all or most of the time over the four weeks prior to the interview.

Apart from three years in the late 1980s, Ireland has consistently recorded a higher score than the EU average on the Eurobarometer survey of life satisfaction and our self-assessed happiness has not collapsed during the current recession. In May 2011, we ranked seventh out of the 27 EU countries, with only Denmark, Sweden, Luxembourg and the Netherlands significantly ahead of us.

In contrast to the sharp drop recorded in Irish life satisfaction during the second half of the 1980s, the recent decline has been modest and seems to have ended in mid-2010.

There is a widespread impression that our suicide rate soared during the recession. In fact, the suicide rate (including deaths due to “events of undetermined intent”) peaked in the late 1990s and fell over the first half of the noughties. While the rate rose significantly in 2009, it fell back in 2010 to the level recorded at the turn of the century.

The suicide rate among the highest-risk group – males aged 25-34 – is now one-third lower than it was in the late 1990s.

Deaths from other violent causes – homicides, poisonings, and roads accidents – have also fallen significantly during the recession, as has the serious crime rate.

One consequence of the recession that is likely to have contributed to these trends is the fall in per-capita alcohol consumption, which is now 20 per cent below the peak reached in 2001.

The prescribing rate for psychoactive drugs has been used as an indicator of the community’s mental health. A recent report from the Mental Health Commission showed that the increase in the prescribing of psychoactive drugs through the General Medical Services Scheme in 2008 relative to 2007 just matched the increase in the numbers eligible under the scheme, providing no evidence of a surge in the incidence of the problems for which these substances are prescribed.

Nor is there any evidence of a surge in the incidence of psychiatric problems from the data on first admission rates to psychiatric hospitals, which fell by more half between 1973 and 2005 and then levelled off. Admission rates have remained relatively stable during the recession but substitution between the different treatment facilities complicates comparisons over time.

Data published by the Health Research Board show that the number of cases dealt with for alcohol-related problems in the mainly outpatient services reporting to the National Drug Treatment Reporting System was stable between 2007 and 2010. Over these years the first admission rate to psychiatric hospitals for these conditions declined by one-third. These indicators show no evidence of a jump in the incidence of problems in the wake of our economic reversal.

Finally, in Europe today there is a strong correlation between life satisfaction and fertility or family size. It could be argued that, in a modern society, having children is the greatest vote of confidence a population can make in the future. In the 1980s the severe recession triggered a 20 per cent fall in the Irish birth rate over a four-year period. But, despite the trebling of the Irish unemployment rate since 2008, the birth rate has remained stable at a relatively high level.

At 2.1, Ireland’s fertility rate is now the highest in the EU and one of the few close to the level needed to replace the population. This is in striking contrast to other crisis-stricken countries like Latvia, Hungary, and Portugal, where fertility rates have fallen to historical lows during the recession.

Ireland is now a different country than it was during the recession of the 1980s. Despite the recent reversal, real GDP per person is more than twice what it was at that time and the level of the main rates of social welfare payments have kept pace with the general rise in living standards. Housing standards are vastly improved.

Even though the unemployment rate has soared, the proportion of the adult population that is employed is now 60 per cent compared with less than 50 per cent in the late 1980s.

These factors undoubtedly help account for the picture of resilience and adjustment rather than breakdown and despair that emerges from the available evidence on how the population is bearing up in the face of our current economic hardships.

Brendan Walsh is professor emeritus, school of economics, University College Dublin