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Fact of the Week: The Working-Age Population in the OECD Will Decline by 8 Percent by 2060

Fact of the Week: The Working-Age Population in the OECD Will Decline by 8 Percent by 2060

August 4, 2025

Source: Organization for Economic Cooperation and Development (OECD), “OECD Job Markets Remain Resilient But Population Ageing Will Cause Significant Labour Shortages and Fiscal Pressures,” news release, July 9, 2025.

Commentary: Labor markets are currently strong in the Organization for Economic Cooperation and Development (OECD), with labor force participation and unemployment at historic highs and lows, respectively. However, signs of slowdown have begun to surface. Though employment is projected to increase over the next two years by 1.1 percent and 0.7 percent, respectively, this growth is expected to reverse over the next several years. The aging populations of many OECD countries will lead to the overall employment rate in the OECD block declining by 8 percent by 2060. What’s more, in more than a quarter of OECD nations, the working age population will decline by more than 30 percent. A decline in the labor force will have significant impacts on the overall economy, with public spending on pensions and health rising by 3 percent of GDP and GDP per capita growth slowing from 1 percent to 0.6 percent per year. Policymakers will have to make targeted adjustments to mitigate economic harm caused by an aging labor force, including encouraging greater labor participation from women and young people, and utilizing productivity-enhancing technology, including robotics and AI.

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