Data from the Central Statistics Office showed that, following 13 years of net immigration during the Celtic Tiger economic boom, more people left the country in the year ended April 2009 than entered it.
Preliminary figures for the following fiscal year showed the net number of departures rose fourfold and the total number of emigrants hit 65,300 — the highest level in more than two decades.
Ireland has a long history of emigration, most notably during the Great Famine in the mid-19th century. There have been several other periods of high emigration, including following World War II and during the 1980s, but that trend reversed sharply in the 1990s as the economy took off.
“People really, genuinely believed emigration was over,” said Noreen Bowden, a consultant and former director of the Emigrant Advice Network.
Even with the rising numbers of departures, there’s still a notion that the effect is temporary and that emigrants will eventually return, but Bowden doesn’t think there’s any evidence to back up that idea.
“If you look historically, there was a big period of return in the 1970s and also for the Celtic Tiger. But the Celtic Tiger’s return was driven by huge staff shortages,” she said.
That scenario doesn’t seem likely to be repeated.
The current downturn, which follows a slump in the property market and huge bailouts for the banks that funded the construction boom, has left Ireland facing 15 billion euros ($20.55 billion) of spending cuts and tax increases in a bid to persuade markets that it can repay its debts. See full story on Ireland’s budget woes.
Initially the emigrants were mostly Europeans who had moved to Ireland for work during the boom years, but more recently it’s younger Irish people who are starting to leave as they finish college and are unable to find a job, said Dermot O’Leary, chief economist at Goodbody Stockbrokers.
While the “brain drain” may be a cause for concern, the government is likely to be conflicted over its response as emigration also helps keep unemployment figures in check.
The Department of Finance made that link unusually explicit in its recent economic forecast for the next four years, effectively saying it’s needed to get unemployment back into single digits.
“Net outward migration will restrain the pace of growth in labor supply, which combined with the increase in net employment will reduce unemployment to under 10% by the end of the forecast horizon,” the Department of Finance said.
Outflow to accelerate
The Economic and Social Research Institute, an independent Irish research group, believes the official estimate of a 34,500 net outward migration in the year to April 2010 appears too conservative when compared with data from a separate quarterly household survey.
The institute has also increased its forecast for the net outflow in the current year, which ends in April 2011 — to 60,000 from 50,000.
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Bowden said the figures would likely be even higher if it weren’t for the fact that some people simply can’t leave because they’ve found themselves in a debt trap, owing more on their mortgage than they could get by selling their house and moving abroad.
That’s resulted in an increase in families being separated as one person moves abroad to find work, while others remain in Ireland trying to pay the mortgage, she said.
The destination of emigrants is also changing as the traditional destinations of the U.S. and U.K. are also not doing well.
Instead there appears to have been an increase in the number of people heading to Canada, Australia and Asia, which brings further problems over providing support for emigrants, Bowden said.
“It’s one thing to be in trouble in New York, where you have two or three Irish centers to help you out. It’s another to fall between the cracks in South America or Asia,” she said.
Still, there could also be a longer-term upside to the fresh emigration as it feeds the Irish diaspora — the communities of Irish emigrants and their descendents across the globe.
The government has begun a review of how to forge closer ties with the diaspora, which recognizes how valuable it could be to the Irish economy in the years to come, Bowden said.
Simon Kennedy is the City correspondent for MarketWatch in London.