Waning workforce participation
July 29, 2024Labor force participation rates in advanced economies is expected to slow or even reverse in the coming years. McKinsey Global Institute partner Anu Madgavkar and colleagues find that even if participation rates rise in line with past trends, the shrinking working-age population in many advanced economies is pushing down the potential for labor force growth through 2030. Some countries, such as Australia and Canada, are projected to continue to see increases in labor supply, but these increases will be smaller than in the past.
Image description:
Eight line charts, 1 for each of the highlighted countries, plot actual labor force growth from 2010 to 2023 and projected growth from 2023 to 2030. The line splits into 2 at 2023, representing stable and growing participation rate scenarios. The growing scenario lines are higher than the 2023 level across all countries except Germany and Italy. The stable scenario lines are lower than the 2023 level for France, Germany, Italy, and Japan. They are higher for Australia, Canada, the UK, and the US.
Source: International Labour Organization; UK Office for National Statistics; UN Population Prospects; McKinsey Global Institute analysis.
End of image description.
To read the article, see “Help wanted: Charting the challenge of tight labor markets in advanced economies,” June 26, 2024.
This article was originally published by a www.mckinsey.com
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