The German Economic Institute (IW) predicts a bleak future for the development of the German labor market. While people have benefited from the baby boomers for decades, according to the forecast, 16.5 million workers will reach retirement age by 2036.
In addition to the labor market, social insurance is also affected. Because while this large part is leaving the German labor market, only 12.5 million employed people are coming. A comparison: “If in 2022 there were just under 30 people over 67 for every 100 people of working age, according to IW calculations there will be around 41 in 2040,” according to the institute. This development could be accompanied by conflicts, especially given the distribution of social benefits. Potential economic growth could also collapse as a result.
IW economist Holger Schäfer sees politics as having the primary task of counteracting this development. For example, it is important to intensify and strengthen the immigration of skilled workers from abroad. This could be achieved through faster visa issuance and easier recognition of foreign professional qualifications. In addition to incentives to ensure that more employed people stay in their jobs beyond retirement age, the individual working hours of employed people should also be increased in order to better exploit the existing potential. “The upcoming wave of retiring baby boomers will lead to distortions in the labor market,” says Schäfer. “Politicians must now set priorities and examine current and new laws with regard to possible effects on the labor supply.”
