Employment and Social Trends 2026

Key messages

• Labour markets remain stable, but this stability is fragile

  Global unemployment is projected to remain unchanged at 4.9 per cent in 2026, pointing to continued resilience in headline labour market indicators following the post-pandemic recovery. However, this stability should not be mistaken for a return to healthy labour market conditions. Beneath the surface, progress in job quality has stalled, inequalities remain entrenched, and labour markets are increasingly exposed to global economic, demographic and technological risks that could quickly undermine current gains.

• The global jobs gap and job quality deficits remain very large

  Looking beyond unemployment, the broader global jobs gap - capturing people who want paid work but cannot access it - is projected to reach 408 million in 2026. This highlights a much larger level of unmet labour demand than indicated by unemployment alone. At the same time, improvements in job quality have slowed sharply. Nearly 300 million workers continue to live in extreme working poverty, and 2.1 billion workers remain in informal employment, often without access to basic rights, social protection or income security. Real wage and labour income growth have yet to fully recover from recent inflation shocks, limiting gains in living standards.

• Labour market outcomes are diverging across income groups

  Labour market trends increasingly differ across country income groups. In high- and upper-middle-income economies, population ageing and slower labour force growth are helping to stabilise unemployment, even as job creation remains modest. In contrast, low-income countries face rapid labour force expansion, with employment projected to grow by 3.1 per cent in 2026. Weak productivity gains and limited structural transformation mean, however, that many new jobs are of low quality. This divergence raises the risk that countries with the greatest demographic potential will struggle to realise a demographic dividend.

• Productivity growth is too weak and uneven to drive convergence

  Global labour productivity is projected to grow at a moderate pace, but uneven pace in 2026 across countries. Productivity gains remain particularly weak in low-income economies, inhibiting income convergence across countries and limiting improvements in living standards and job quality. At the same time, the pace of structural transformation - the movement of workers into higher-productivity and more formal sectors - has slowed markedly over the past two decades, constraining the ability of economies to generate sustained high-productivity job growth- as well as overall income growth.

• Inequalities persist, especially for women and young people

  Persistent inequalities continue to shape access to work and job quality. Women account for only two-fifths of global employment and are 24.2 per cent less likely than men to participate in the labour force, reflecting enduring barriers to paid work. Young people face particularly severe challenges: global youth unemployment stands at 12.4 per cent, and 20 per cent of youth - around 260 million people - are not in employment, education or training. These disadvantages risk leaving lasting scars on the lifetime employment prospects of these groups of workers.

• Trade and global risks are reshaping labour market prospects

  Trade and global value chains continue to support employment, with around 465 million jobs linked to foreign demand worldwide. In low- and middle-income countries these jobs tend to offer better working conditions and higher productivity. However, slowing growth of global trade, heightened trade policy uncertainty and rapid technological change could be reshaping labour market prospects. Together, these factors are increasing uncertainty and limiting the potential of trade to act as a strong engine of job creation and job quality improvements. In addition, risks stemming from accelerating adoption of AI and high sovereign debt could deteriorate the labour market outlook should they materialize.

• Closing decent work deficits will increasingly rely on domestic action

  With subdued global growth and external financing under pressure, future progress will depend increasingly on domestic policy choices. Strengthening job creation, boosting productivity growth, investing in skills, expanding social protection and reinforcing labour market institutions, particularly to protect and support workers and small and medium enterprises will be critical to reducing decent work deficits. Coordinated domestic action will be essential to building more inclusive and resilient labour markets in an increasingly uncertain global environment.