A significant demographic shift is underway in the German labor market, according to data released Wednesday by the Federal Statistical Office (Destatis) Approximately 134 million currently employed individuals will surpass the statutory retirement age of 67 by 2039, representing roughly 31 percent of the workforce available last year
The data highlights a coming imbalance as younger age cohorts are not projected to numerically replace the retiring “baby boomer” generation In 2024, individuals aged 60 to 64 – who are transitioning towards retirement – still comprised 44 million of the workforce, with an employment rate of 68 percent A larger proportion – 85 percent – of the younger baby boomers (aged 55 to 59) totaling 56 million, remained actively employed, representing the largest single age group in the workforce
Combined, these two cohorts – 55-64 year olds – comprise 100 million employees, exceeding the total number of workers aged 54 and under While those aged 45-54 and 35-44 boast the highest employment rates at 90 and 89 percent respectively, their total numbers (93 and 98 million) are still lower than those of the baby boomers Similarly, the 25-34 age group (90 million) and the youngest cohorts under 25, who are often still in education or training, fall below the numbers represented by the older generations
Discussions are ongoing regarding strategies to mitigate a potential future labor shortage, including keeping or reactivating the larger birth cohorts in the workforce for a longer period The employment rate of older individuals has already increased over the past decade: from 65 percent for those aged 55-64 in 2014 to 75 percent in 2024 – a 10 percentage point rise
This increase is more pronounced than in younger age groups, where the employment rate for 15-24 year olds rose by 5 percentage points to 51 percent over the same period The rate for 25-54 year olds saw a more modest increase, rising from 83 percent in 2014 to 85 percent in 2024
Despite the increasing employment of older individuals, many still choose to retire early This is attributed to a range of factors including health concerns, long-term contributions to insurance schemes, early retirement offers from companies and a desire for increased leisure time
While 82 percent of 58-year-olds were still employed last year (compared to 74 percent in 2014), the rate dropped to 79 percent for 60-year-olds (69 percent in 2014) The decline becomes more noticeable after age 62: 70 percent (56 percent in 2014) were still employed at that age, falling to 46 percent at 64 (33 percent in 2014) At ages 66 and 68, the employment rates were 22 percent (15 percent in 2014) and 16 percent (11 percent in 2014) respectively, indicating a significant proportion had left the workforce