The OECD reports that job markets across member countries remain robust, with labour force participation reaching record highs and unemployment rates staying historically low. In May 2025, employment across the OECD reached 668 million, marking a 26% increase since 2001. However, the report also highlights emerging signs of economic slowdown due to geopolitical tensions and uncertainties in trade policy. Despite these challenges, employment is projected to grow by 1.1% in 2025 and 0.7% in 2026, while unemployment is expected to remain around 4.9%, a level it has maintained for over three years. Notably, women continue to face a slightly higher unemployment rate than men.
The report notes encouraging progress in gender equality in employment. From Q1 2024 to Q1 2025, the employment rate of women increased by 0.2 percentage points more than that of men, narrowing the participation gap by 0.3 percentage points. This trend has been largely driven by more women joining the labour force, signaling positive strides toward closing gender disparities in the job market.
Real wage growth has resumed in most OECD countries, although in nearly half of them, wages remain below early 2021 levels—prior to the inflation spike following the pandemic. Nonetheless, wages for the lowest-paid workers have remained strong due to increases in real statutory minimum wages in almost all countries with a national minimum wage.
A key focus of the 2025 Employment Outlook is the long-term impact of demographic change. The OECD warns that declining birth rates and rising life expectancy will pose serious challenges to employment and economic growth. By 2060, the working-age population is expected to shrink by 8% across the OECD, while annual public spending on pensions and healthcare is projected to rise by 3% of GDP. This demographic shift will lead to significant labour shortages and fiscal pressures unless urgent policy action is taken.
The report projects that by 2060, more than a quarter of OECD countries will experience a reduction of over 30% in their working-age population. Additionally, the old-age dependency ratio, which stood at 19% in 1980 and 31% in 2023, is expected to rise to 52% by 2060, placing greater financial strain on public systems and the workforce.
Without timely and ambitious reforms, the OECD anticipates that GDP per capita growth could fall by about 40%, from 1% annually between 2006 and 2019 to just 0.6% per year between 2024 and 2060. Nearly all OECD countries are expected to experience a slowdown in per capita growth unless demographic challenges are addressed proactively.
Reducing the rate at which older workers exit the labour force could significantly mitigate the negative economic impact. By aligning departure rates with those in the top-performing 10% of OECD countries, the report shows that GDP losses from ageing can be curbed. This calls for improved career mobility, targeted upskilling, and policies that encourage older workers to stay in the labour market longer.
Reviving productivity growth is also crucial. The report emphasizes the need to harness digital technologies and artificial intelligence in a responsible manner, ensuring that workers are equipped with the right skills to adapt to evolving labour market demands and seize new opportunities.
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