Future of Work - Major trends

Declining labour force participations rates will exacerbate demographic changes

The slowdown in the working-age population and its potential implications will be exacerbated by the trend decline in participation rates across most ILO regions. Looking ahead to 2030, participation rates are expected to continue their long-run decline. In fact, at the global level, participation rates are anticipated to fall by 1.6 percentage points between 2015 and 2030 (with declines in excess of 2 percentage points expected in most regions). An important exception in this regard is Africa, where the participation rate is expected to rise by 1.4 percentages.

Figure: Anticipated decline in labour force participation rates, 2015-2030 (percentage points)

Source: ILO Statistics.
In some instances, falling participation rates are the result of improved educational attainment and the ensuing reduction in youth participation rates. In this regard this is good news, but the full effect of this may be limited by the extent that these economies can create jobs that leverage these enhanced skills sets and lead to productivity gains and growth. On the other hand, high participation rates can be the result of a lack of other opportunities for one’s livelihood, e.g. limited social protection coverage. Regardless, in the absence of any policy response, the combination of population ageing and the trend decline in participation rates is likely to negatively affect growth through lower investment and less job creation.

For more information, see our Issues Note Series, No. 2 and box 1.2 of World Employment and Social Outlook: Trends 2015.