The number of workers in Germany is expected to shrink over the next few decades: According to a projection by the Institute for Labor Market and Vocational Research (IAB), the labor force potential will decline by 11.7 percent by 2060. Factors such as demographic change, birth rate, immigration and emigration were taken into account. “The results show that companies will have significantly fewer workers available in the coming decades,” said IAB economist Enzo Weber.

The IAB had long ago predicted a decline in the potential labor force of seven million people if no countermeasures were taken. The projection includes the countermeasures as well as numerous external factors such as the economic and demographic development abroad, but also the birth rate. The result afterwards is almost even more sobering: the potential still drops by several million.

Employment rates of women and older people

According to the study, the employment rates of women and older people will develop positively in the next few years. For German women under the age of 55, the rate increases from 87 to 93 percent, for foreign women from 67 to 77 percent, and the birth rate increases from 1.5 to 1.7 children per woman. “If we want to avoid the shrinkage, we have to step up the countermeasures at least two more,” said Weber.

He sees starting points in labor market participation, particularly among foreign women and older people, in reducing unemployment and in migration. “Third countries are becoming more and more important to the EU when it comes to labor migration. The hurdles must therefore be further removed, but at the same time more must be done to ensure that immigrants gain a foothold in the labor market and find long-term prospects in Germany,” emphasized Weber.

Immigration from EU countries will decrease

According to the study, immigration from EU countries such as Poland or Romania will decrease significantly given the efforts made to date. While an average of 900,000 people from EU countries came to Germany in the past ten years, by 2060 it will only be 600,000. In return, immigration from third countries will increase from 240,000 to 500,000. At the same time, however, emigration will increase from the current 750,000 people to one million.

According to the projection, only 72.6 million people will live in Germany in 2060, around ten million fewer than at present. Above all, immigration from EU countries is likely to fall sharply because living conditions there are improving and demographics are even less favorable than in Germany.