The labour force in Germany, the number of people who are potentially available to the country’s labour market, will decline in the long term due to demographic changes. Even with an increasing labour force participation rate of women and older people and an annual net immigration of 100,000 people, the labour force will decline from 47.4 million in 2020 to an expected 38.3 million in 2060, according to a new study.
According to the survey, published on Tuesday by the Nuremberg-based Institute for Employment Research (Institut für Arbeitsmarkt- und Berufsforschung or IAB), the labour market supply would only remain almost constant even with net annual immigration of 400,000 people. Without immigration, the labour force potential would decrease by 7.2 million by 2035, and by as much as 16 million by 2060.
“Despite optimistic assumptions about female labour force participation and employment of older people, it will be difficult to slow the declining trend in the labour force potential,” said IAB researcher Johann Fuchs. If migration flows remain at the same level as before the pandemic, the labour force potential will decrease by 20 percent by 2060.
One of the main reasons for the low level of immigration is the declining migration potential from the main countries of origin in the European Union due to the demographic changes that are also taking effect there.
With a better integration of foreign women into the labour market, labour force participation rates of German women that are in line with those of German men, as well as significantly higher labour force participation rates of older people, a potential of 3.4 million could be added to the labour force by 2035, the study said.
Sola Jolaoso with agency report