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Labor Market Analysis

Skilled Labor Shortage in Germany

In Germany, the demand for immigrants in the German training market is increasing because the domestic offspring can simply no longer compensate for the age-related departure of older employees. New data from the employer-related Institute of the German Economy (IW) show how tense the situation is now. If there were no immigrants, the number of employable people should fall immediately in all 401 urban and rural districts, by an average of four percent in all districts by 2024 (Haas, 2021).

Even if some of the people who have not previously worked full-time in this country worked more hours, in many regions of Germany that would no longer be sufficient to close the resulting skilled labor gap. Demographic change is developing into a serious threat to prosperity in Germany as a whole. The situation is particularly dramatic in East Germany, but in West Germany too there are now many districts that, according to IW, are facing a 4 to 7 percent decline in the working population. Overall, no longer any German district is predicted to see a growth in the labor force.