Germany: IW Institute Forecasts 4.3 Million Worker Shortage by 2036

Germany could face a severe labor shortage, reaching over 4 million workers by 2036. This forecast, released by the German Economic Institute (IW) and reported by Spiegel, indicates a significant worsening of the situation compared to estimates from two years ago, when the deficit was projected to be less than 3 million people.

The primary reason for the deteriorating forecast is updated demographic data, showing a decrease in immigrant inflow and an overall aging population. Additional factors influencing the situation include weak economic prospects and a decline in Germany's attractiveness for labor migration.

According to IW estimates, Germany's population could shrink to 81.1 million people by 2045, approximately 2.9% less than currently. The potential workforce will decrease from 55 million in 2025 to 51.2 million in 2036, and further to 50.4 million by 2045. By 2036 alone, about 9.8 million people will reach retirement age, creating a significant imbalance in the labor market.

At the same time, the IW emphasizes that demographic forecasts carry a high degree of uncertainty, as they depend on birth rates, migration, and life expectancy, all of which can change significantly. Earlier reports indicated that the German reservist association calls for raising the maximum age for reservists to 70 due to demographic trends. Furthermore, according to a report by the charitable organization Paritätische, poverty in Germany rose to a record 16.1% in 2025, affecting approximately 13.3 million people.