OECD Employment Outlook 2025

• September 2, 2025
• admin

The “OECD Employment Outlook 2025” shows that labour markets remain fairly strong, with high employment rates and low unemployment, although the pace of growth is beginning to slow. Wages are gradually rising again in many countries, especially for lower-paid workers, but in many cases they still haven’t fully recovered from the impact of recent inflation. Some sectors continue to face staffing shortages, and people are generally working fewer hours than in the past.

Looking ahead, ageing populations and declining birth rates are expected to create serious challenges for the workforce, putting pressure on economic growth and public systems. To manage these shifts, countries will need to encourage older people to stay in work longer, close gender gaps, and make it easier for migrants to contribute to the labour market. Flexible job options, better working conditions, and lifelong learning opportunities will all be important parts of the solution.

Intergenerational inequalities are widening, with older generations improving their relative income and wealth positions over the past decades, while younger people face greater challenges, including lower home-ownership and higher poverty risk. This shift raises concerns about social cohesion and economic equity. Furthermore, skills and productivity gaps between younger and older workers are significant. Older employees tend to have lower literacy, numeracy, and digital skills and participate less in training, slowing their adaptation to evolving labour market demands. These issues call for lifelong learning initiatives and policies supporting mid-career and older workers, alongside more flexible retirement options.

Finally, job mobility, a key factor in wage and productivity growth, is slowing down, especially among older workers. The decline in job-to-job mobility reduces the economy’s ability to reallocate labour toward more productive firms, dampening growth prospects. To address this, policies need to enhance labour market flexibility by removing barriers such as restrictive non-compete agreements and encouraging pay transparency. Supporting job mobility will be essential for sustaining economic dynamism amid demographic shifts and changing labour market conditions.

In conclusion, while OECD labour markets have demonstrated resilience, overcoming the profound demographic challenges to ensure sustainable and equitable growth will necessitate bold and comprehensive policy actions focused on mobilising all untapped labour resources and enhancing productivity across the life course.