Brexit: Northern Ireland and Ireland - On Borderlines and Gender Gaps

"If you and I could only work together we might do something for the island." - James Joyce, Ulysses

The Brexit referendum on the UK’s membership in the European Union on 23. June 2016 revealed that Northern Ireland voted to remain. Apart from The Troubles which was settled in the Good Friday Agreement, economic reasoning was the main factor for this outcome. Trade was and is a powerful instrument for societies to prosper and to live in peace. Even the UK's Prime Minister Theresa May’s plan for a “soft” Brexit honored this approach as she wanted to settle a backstop agreement with the European Union, giving Northern Ireland a special status in terms of trade agreements. It is well known that this proposal was rejected twice, the second time on Tuesday, March, 12th, 2019.

World Data Lab (WDL) is taking this opportunity to step in and provide insight on the economic situation of Northern Ireland and Ireland. Using our state-of-the-art forecasting tool MarketPro, we can explore real-time data and forecasts on spending power development on a NUTS 2 regional level segmented by gender and age cohorts. We combine country-specific historical income distribution forecasts with projections from the Intergovernmental Panel on Climate Change (IPCC) on population trends by age and education, as well as GDP forecasts provided by the World Economic Outlook of the IMF. Thus, it is now possible to provide the first internally consistent predictions of economic development and other indicators for all countries and regions worldwide and can – regarding the effects of Brexit – serve as a baseline scenario for Northern Ireland's economic development. If Brexit is indeed going to happen, we will be able to provide real-time evidence taking advantage of our methodology to implement the IMF’s World Economic Outlook changes every six months. We will be able to easily detect any effects of Brexit soon after, if it should occur, on economic performance and average consumption power. For further insights into our methodology, see our article in the renowned scientific journal Nature.

Age and gender

Even though Northern Ireland voted mainly for remain in the Brexit referendum, YouGov and The Economist revealed that the voting behavior of British citizens was strongly dependent on age, gender and income, education and party preference, with older males most likely voting for the withdrawal from the European Union. This is a finding worthy of closer analysis. Therefore, we will shed light on the spending power capabilities of the people of Northern Ireland, segmented by gender and age and compare it with the spending power development of the Republic of Ireland.

Ireland’s average annual consumption power will surpass that of the Northern Irish by end of this year. By 2020, a Northerner will be able to spend on average $20,263 per year (in 2011 PPP) whereas its average southern neighbor will have $20,442 per year to spend. From 2016 to 2031, it is expected that Irish spending power will grow by 1.9% annually, leaving Northern Ireland behind whose growth rates will average only 1.1% annually.

Splitting it along gender lines, for both Northern Irish males and females, growth is rather small with a 1.1% and 1.14% average annual increase (2016-2031), whereas growth rates for Ireland's males and females mirror the general picture and are more pronounced with 1.92% and 1.93% respectively. This also means that Irish males are overtaking their Northern Irish counterparts in the middle of 2019, but also that Irish females will have more to spend than Northern Irish women by 2021, and even more than Northern Irish men by the end of 2022.

Figure 1: Average annual spending power per capita, in 2011 USD PPP

In general, there is a gender gap in both Ireland and Northern Ireland. Whereas this gap is relatively low in the North ($295 in 2019) and is expected to further decrease to $235 by 2031, the gap in Ireland is comparably high. In 2019, females in Ireland have on average $703 less to spend than their male counterparts and this is expected to widen even further to $861 by 2031.

In the Republic of Ireland, there is a fact worth mentioning. In the 45-65 age group, females have more spending power than their male counterparts – $22,462 vs. $22,356 in March 2019 – and this is not expected to change until 2031. But this is the only exception and only in the Republic of Ireland as in all other age cohorts, males have more disposable spending means than females.

In the 15-30 age cohort from Northern Ireland (those who voted strongest in favor of remaining in the European Union), they've had less spending power than the same demographic group in Ireland since 2016. In the 30-45 age cohort, this happened in early 2019. For the 45-65-year-olds, the group with the relatively highest spending means, this is going to happen in 2025, when the Irish middle aged will have $25,031 and their Northern Irish peers, $24,924. Finally, in the 65+ age group (those who voted strongest for Brexit), this will not happen before the year 2027. Notice that the older the age cohort, the longer it is expected to take the Irish to overtake the Northern Irish in spending power. Hence, it can be said – and be a valuable addition to the YouGov and The Economist finding – that the better off an age segment was in Northern Ireland in relation to the Republic of Ireland, the more likely it voted to leave the EU which somehow contradicts the interests of the younger generations to prosper via trade and live in harmony.

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