Core issues in 2026

AGEING POPULATION, SHRINKING WORKFORCE AND FUTURE LABOUR SHORTAGES

The world’s population is aging rapidly, as fertility rates plummet and worldwide longevity increases. The share of old people over the population is increasing in virtually every country in the world and the United Nations (n.d.a) estimate that the world’s population will peak in the mid-2080 at around 10.3 billion people, before gradually declining over the following decades. In 2020, people above the age of 60 outnumbered children under the age of five, and the proportion of the world’s population aged over 60 is estimated to reach 22% by 2050 (World Health Organization, 2025).

An aging population has significant consequences on the world’s labour supply and will create significant challenges for labour markets and economic growth over the next decades. The Organisation for Economic Co-operation and Development (OECD, 2025a) estimates that by 2060 the working-age population will decline by 8% and annual public spending on pensions and health will rise by 3% of the GDP in the OECD area. A shrinking workforce implies diminished economic production and less innovation, slower economic growth, the exacerbation of labour shortages in critical sectors, and a steady decline in tax revenues paired with an increasingly unsustainable financial strain on existing social security systems across the world (United Nations Economic Commission for Europe, 2025, p. 1).

Ensuring sustained economic growth and decent work for all will thus require a careful management of the demographic transition. High-income countries, where fertility rates are already below the replacement rate, need immediate solutions to mitigate labour shortages over the next few years and to actively reform their social security systems to make them more fiscally sustainable. This can entail encouraging a greater participation of women in the workforce or focusing, attracting skilled migrant workers from countries that aren’t able to fully absorb their labour force into productive employment, or investing in new technologies (Joint Research Centre, 2025). On the other hand, it is vital for low- and middle-income countries with young populations to invest in education, health, and infrastructure to fully exploit their demographic dividend and ensure a smooth entry of their youth into productive employment (United Nations, n.d.a).

PERSISTENT BARRIERS FACED BY WOMEN AND THE YOUTH

All across the world, young people are struggling to access decent work, albeit they represent the best educated generation in human history and the hope for a better future (International Labour Organization [ILO], 2023a). As reported by the United Nations (n.d.b), 12.4% of young women and men aged between 15 and 24 were unemployed in 2025, nearly four times the rate of adults, while a concerning 259 million youths, i.e. one in five, were neither in education nor in employment or training. 

Moreover, youths are also disproportionately involved in “bad” jobs. They are more likely to live in conditions of extreme poverty than adults and are far more likely to be informally employed, with little to no social protection. Up to 78% of young people were estimated to be informally employed in 2021, compared to 58% of adults (ILO, 2023a).

Women also face systemic barriers that prevent them from accessing decent work. In 2025, female employment represented just 40.1% of total global employment and women all across the globe remain more likely than men to work in insecure, unsafe, and poorly paid jobs (ILO, n.d.a; UN Women, n.d.). The situation is even worse for young women, who face the greatest barriers in accessing education and employment opportunities. As stressed by the ILO (2023a), the female youth NEET rate was more than double the male rate, reaching 32% in 2022 against 15% for young men.

Addressing the systemic barriers faced by disadvantaged groups seeking employment is of crucial importance to achieve SDG 8. The exclusion of the youth and women from the labour market doesn’t just put these individuals in a precarious position from a financial standpoint, but it also represents a loss in economic production for the worldwide economy. As stressed by the United Nations (n.d.c), closing the gender gap alone could potentially increase global GDP by 35%. Therefore, extending access to decent work to all human beings, regardless of their age or gender, is of crucial importance to ensure a sustainable economic development across the world.

SLOWDOWN OF LABOUR PRODUCTIVITY GROWTH

Labour productivity growth has always been regarded as a crucial indicator for long-term economic growth and prosperity (Erber et al., 2017). While declining labour productivity growth in high-income countries is a well-known phenomenon that has been observed over several decades, this slowdown is now spreading to middle- and low-income countries as well, hampering economic growth across the developing world and reducing the pace of convergence of many countries toward economic prosperity (Erber et al., 2017; ILO, 2023b, p. 2). 

Gains from labour productivity growth across the world remain insufficient to boost real wages and to compensate for current global trends that are hampering economic growth worldwide, such as rising geopolitical tensions, supply chain disruptions, reduced trade flows, and increasing energy price volatility (United Nations Statistics Division [UNSD], n.d.). This will prolong the persistence of economic inequalities between rich and poor countries, threatening the timely achievement of SDG 8. As of 2023, labour productivity levels were 18 times lower in low-income countries than in high-income countries, an enormous gap that needs to be closed as soon as possible (ILO, 2023b, p. 2). 

Boosting labour productivity growth remains critical to ensure widespread and sustained real income increases and it requires accelerated investment, broader technological diffusion and stronger skills development (ILO, 2023b , p. 2; UNSD, n.d.). As stressed by the OECD (2025b), high productivity is strongly linked with higher levels of human capital across the workforce (p. 14). Sustained investment in education, vocational training, and upskilling and reskilling programmes are therefore essential to make economies of the developing world more productive and to lift people out of poverty and out of precarious employment.

WIDESPREAD INFORMAL EMPLOYMENT

Informal employment affects almost every country in the world, representing a universal challenge in the achievement of SDG 8. Informal workers make up nearly 60% of the global workforce and up to 90% in low-income countries (OECD, 2024, p. 13). Informal employment tends to be predominantly concentrated in the informal economy, where people are employed without any formal work arrangements by micro- and small-sized firms that are not formally recognized. However, informal employment can also concern the formal sector of the economy or private households, who often employ domestic workers without any formal work arrangement (ILO, 2026).

As stressed by the ILO (n.d.b), informal employment exposes workers to significant risks, compromising their occupational safety, their health, and providing inadequate compensations, leaving them in an extremely vulnerable and precarious position. Furthermore, informality tends to affect some people more than others. More than half of all informal jobs in the world are concentrated in the agriculture, wholesale and retail, manufacturing, and construction sectors, while youths and women tend to be disproportionately involved in informal employment (ILO, 2026; Ludwig Institute for Shared Economic Prosperity, n.d.).

The educational background of the individual is another strong predictor for his or her likelihood of ending into informal employment. Workers with the lowest educational levels are by far the most exposed to informality, whereas advanced levels of education tend to be correlated with a lower incidence of informal employment, although no occupation or educational attainment level fully escapes it (ILO, 2026).

Particularly concerning is the fact that informality and low-paying work tend to have an hereditary component. As reported by the OECD (2024), children of low-paid, informal workers often inherit their parents’ vulnerability and generally have a lower chance of securing a formal job as they grow up, as their family’s financial constraints limit their school attendance and their professional opportunities. This vicious cycle traps many individuals within informal employment indefinitely, condemning not just their lives, but also their children’s lives to an existence of perpetual precariousness and financial uncertainty. 

Informality remains a key concern in the area of decent work for all, hindering the achievement of not only SDG 8, but also of SDG 1 (No poverty), SDG 3 (Good health and well-being), and SDG 5 (Gender equality). Reducing informal employment would not just benefit the many people currently trapped within it, but it would benefit everyone instead, as men and women across the world would be able to tap into their full potential as human beings and contribute more to the world economy. 

LIST OF REFERENCES

Erber, G., Fritsche, U., & Harms, P. C. (2017). The Global Productivity Slowdown: Diagnosis, Causes and Remedies. Intereconomics, 52(1), 45-50. https://doi.org/10.1007/s10272-017-0642-2

International Labour Organization. (2023a, August 8). Sustainable Development Goal 8: There cannot be decent work for all without decent work for youth.  Retrieved September 7, 2026, from https://www.ilo.org/resource/article/there-cannot-be-decent-work-all-without-decent-work-youth

International Labour Organization. (2023b, September). Policy Brief: Sustainable Development, Decent Work and Social Justice [Policy Brief]. https://doi.org/10.54394/OKKX4516

International Labour Organization. (2026, May 11). Decent Work Reality Check: Informality Across the World of Work, ILOSTAT. Retrieved September 7, 2026, from  https://ilostat.ilo.org/blog/decent-work-reality-check-informality-is-everywhere/

International Labour Organization. (n.d.a). Statistics on women, ILOSTAT. Retrieved September 7, 2026,  from https://ilostat.ilo.org/topics/women/

International Labour Organization. (n.d.b). Statistics on the informal economy, ILOSTAT. Retrieved September 7, 2026, from https://ilostat.ilo.org/topics/informality/

Joint Research Centre. (2025, June 11). Tackling EU’s shrinking workforce? Better education, more women in jobs, skilled migration. European Commission. Retrieved September 7, 2026, from https://joint-research-centre.ec.europa.eu/jrc-news-and-updates/tackling-eus-shrinking-workforce-better-education-more-women-jobs-skilled-migration-2025-06-11_en

Ludwig Institute for Shared Economic Prosperity. (n.d.). The Informal Economy: Income-generating activities conducted outside traditional employment and wage-tracking systems. Retrieved September 7, 2026, from https://www.lisep.org/informal

Organisation for Economic Co-operation and Development. (2024). Breaking the Vicious Circles of Informal Employment and Low-Paying Work. https://doi.org/10.1787/f95c5a74-en

Organisation for Economic Co-operation and Development. (2025a, July 9). OECD job markets remain resilient but population ageing will cause significant labour shortages and fiscal pressures [Press release]. https://www.oecd.org/en/about/news/press-releases/2025/07/oecd-job-markets-remain-resilient-but-population-ageing-will-cause-significant-labour-shortages-and-fiscal-pressures.html

Organisation for Economic Co-operation and Development. (2025b). The Global Forum on Productivity at 10: Past and Future Perspectives on Reviving Productivity Growth. https://doi.org/10.1787/ca7295d9-en

United Nations. (n.d.a). Global Issues: Ageing. Retrieved September 7, 2026, from https://www.un.org/en/global-issues/ageing

United Nations. (n.d.b). Goal 8: Decent Work and Economic Growth. Retrieved September 7, 2026, from https://www.un.org/sustainabledevelopment/economic-growth/

United Nations. (n.d.c). Women and Girls - Closing the Gender Gap. Retrieved September 7, 2026, from https://www.un.org/en/un75/women_girls_closing_gender_gap

United Nations Economic Commission for Europe. (2025, April). Unlocking the Potential of an Ageing Workforce [Policy Brief]. https://unece.org/population/publications/unlocking-potential-ageing-workforce

United Nations Statistics Division. (n.d.). Decent work and economic growth. United Nations Department of Economic and Social Affairs. Retrieved September 7, 2026, from https://unstats.un.org/sdgs/report/2026/Goal-08/

UN Women. (n.d.). SDG 8: Promote sustained inclusive and sustainable economic growth, full and productive employment and decent work for all. Retrieved September 7, 2026, from https://www.unwomen.org/en/news/in-focus/women-and-the-sdgs/sdg-8-decent-work-economic-growth

World Health Organization. (2025, October 1). Ageing and health. Retrieved September 7, 2026, from https://www.who.int/news-room/fact-sheets/detail/ageing-and-health