Germany Faces Labor Shortage of Over 4 Million by 2036, IW Forecasts
Germany could face a shortage of about 4.3 million workers by 2036 due to demographic changes and reduced immigration, according to a new forecast by the German Economic Institute (IW).
Germany risks a severe labor shortage in the coming years, with the German Economic Institute (IW) projecting a deficit of approximately 4.3 million workers by 2036. This marks a significant deterioration from the institute's forecast two years ago, which estimated a shortfall of just under 3 million.
The updated demographic data, including lower immigration inflows and an aging population, are cited as the main reasons for the worsening outlook. Additionally, weak economic prospects and Germany's declining attractiveness for labor migration have contributed to the trend.
According to IW estimates, Germany's population could shrink to 81.1 million by 2045, about 2.9% less than today. The potential labor force is expected to decline from 55 million in 2025 to 51.2 million in 2036, and further to 50.4 million by 2045.
By 2036 alone, around 9.8 million people are expected to reach retirement age, creating a significant imbalance in the labor market. IW notes that demographic forecasts carry a high degree of uncertainty, as they depend on fertility, migration, and life expectancy, which can change substantially.
The German Reservists Association has called for raising the maximum age for reservists to 70, citing demographic trends. Meanwhile, a report by the Paritätische association of charitable organizations found that Germany's poverty rate hit a record 16.1% in 2025, affecting about 13.3 million people.
