IW Study: Germany Expected to Lack 4.3 Million Workers by 2036

Demographics and Labor Force Potential

According to the report, the labor force potential is set to fall by 6.9 percent by 2036, from 55 million people in 2025 to 51.2 million. In the long term, by 2045, the labor force potential will decline by as much as 8.3 percent to 50.4 million people. Based on the population forecast, this results in a gap of 4.3 million people.

One cause, in the Institute's assessment, is the Federal Government's more restrictive migration policy. As a result, significantly fewer new immigrants are coming to Germany. At the same time, there is declining interest among foreign skilled workers in Germany "auch wegen der anhaltenden Schwäche der Wirtschaft und wachsender Arbeitsmarktprobleme," as the report states.

Causes: Migration and Economy

The researchers are calling on policymakers to do more to increase the labor force potential – for example, through better recruitment of foreign skilled workers or by extending working hours. The report leaves open what concrete steps policymakers should take.

The report provides no information on a possible change in labor productivity, for example through artificial intelligence. This leaves open whether technological efficiency gains could mitigate the projected gap. The IW is described as being close to employers.

IW's Political Demands

The findings come from an IW study that was made available in advance to the "Rheinische Post" (Saturday edition). The report was distributed via the dpa-AFX news agency from Berlin. The news was broadcast on Deutschlandfunk on 13.06.2026 in the program. In its 2024 forecast, the IW had still assumed moderate population growth through 2040.

The findings put the Federal Government facing the task of stabilizing the labor market. Two levers are likely to be discussed above all: more active skilled-worker immigration and measures to increase domestic labor force participation. Without political countermeasures, the German economy faces a noticeably shrinking personnel gap, according to the IW's assessment.