Successfully Safeguarding Skilled Personnel Would Significantly Increase Wealth in Germany

If politics and economy do not manage to considerably increase the labour force participation of senior employees and women in the coming years, the German economy and thus all German citizens will face substantial losses in wealth. Yet, if the loss of labour force due to demographic changes can be balanced out partially, cumulative wealth gains could be achieved, amounting to approximately 450 billion euros between 2014 and 2025. This approximately equals the current annual gross domestic product of Bavaria. These are the findings of a study conducted by the Centre for European Economic Research (ZEW) in Mannheim, on behalf of the Federal Ministry of Labour and Social Affairs. The study analyses wealth effects resulting from different measures to safeguard skilled personnel.

In the basic scenario, a demographic decline in the working population of around 2.5 million is assumed until 2025. On this basis it is calculated which value adding effects can be achieved through measures for securing skilled personnel. If, for example, from 2014 onwards the labour force supply could be increased by 100,000 persons per year, the value of goods and services produced in Germany would be two per cent higher compared with the basis scenario. Until 2025 this increase in production would reach a considerable amount. Over the years, the value added gain would amount to around 450 billion euros, which approximately equals the current annual gross domestic product of Bavaria.

The study shows that, to achieve this increase in the labour force, the employment rate for older workers over 55 would have to increase by six percentage points. At the same time the employment rate for women under 55 would have to increase by just less than two percentage points. This means that, with regard to these three variables, Germany would have to close the current gap to Sweden, the European frontrunner in terms of labour force participation, by half.

For further questions please contact

Dr. Marcus Kappler, Phone +49 621/1235-157, E-mail kappler@zew.de

Dr. Holger Bonin, Phone +49 621/1235-151, E-mail bonin@zew.de