Select Committee on Northern Ireland Affairs Minutes of Evidence

Further memorandum by the Northern Ireland Economic Council

HOW ARE COMMUNITY DIFFERENTIALS TO BE MEASURED?

A central plank in Peter Brooke's TSN statement concerned the issue of reducing community differentials. This raises the seemingly innocuous issue of how these are to be measured. In the case of unemployment rates—often considered central to TSN—is it the percentage point difference between Catholics and Protestants (e.g., 20 per cent-10 per cent = 10 per cent) or the ratio of rates (e.g., 20 per cent/10 per cent = 2)? If defined in terms of percentage point difference then, other things being equal, policy could be religion-blind and reduce differentials (Policy 1 in Box 2). The ratio of the rates would, however, remain unchanged at 2 (i.e., 10/5 = 2). If, on the other hand, by community differential is meant the ratio, then Government would have to skew resources disproportionately towards Catholics (Policy 2 in Box 2). This implies, other things being equal, that Catholics, in similar circumstances to Protestants, would be treated more favourably. Thus, defining the differential will have important policy implications.

BOX 2

Reducing Community Differentials. The Case of Unemployment. An Illustrative Example.
 Initial state Unemployment number Employment number Unemployment rate percentage Catholic 60,000 240,000 20 Protestant 30,000 270,000 10

Policy intervention

Create/assist 45,000 unemployed persons into employment.

Assumptions

—  Inactivity, migration remain unchanged.

—  No new entrants to labour force.

—  No displacement of employed by unemployed moving into employment.
 Policy 1: Religion-blind1 30,000 places to Catholic unemployed; 15,000 places to Protestant unemployed Unemployment number Employment number Unemployment rate percentage Catholic 30,000 270,000 10 Protestant 15,000 285,000 5 Note: Differential (compared to initial state); Percentage Point 10 -‹ 5; Ratio 2 -‹ 2. 1 The probability of being selected is the same for all the unemployed, irrespective of religion. In the example the probability is 0.5 or a half (i.e., for Catholics 30,000/60,000; for Protestants 15,000/30,000. Source: NIEC.

 Policy 2: Targeted towards Catholic unemployed1 35,000 places to Catholic unemployed; 10,000 places to Protestant unemployed Unemployment number Employment number Unemployment rate percentage Catholic 25,000 275,000 8.3 Protestant 20,000 280,000 6.7 Note: Differential (compared to initial state); Percentage Point 10 -‹ 1.6; Ratio 2 -‹ 1.2. 1 The probability of being selected is higher for Catholics than Protestants. In the example, the probability for Catholics is 0.58 (i.e., 35,000/60,000; for Protestants 0.33 (i.e., 10,000/30,000). Source: NIEC.