Potential labour force in decline

09/02/2007 09:30

After continuous growth over the past century, the potential labour force is about to decline. On 1 January 2007, there were 10 million Dutch residents in the 20–65 age bracket. Their number will decline significantly in the years to come. According to Statistics Netherlands, the proportion of older people within the potential labour force will also increase dramatically.

Anticipated reduction of 1 million

Between 2007 and 2040, the potential labour force is anticipated to shrink from 10 to 9 million. The decline will gain momentum in the near future, although the first signs of a shrinking labour force in 2005 were only marginal.

Population ageing affects labour force

The proportion of older people within the potential labour force is growing. The 50-65 age category increased by 62 thousand in 2006, whereas the 20-50 age category was reduced by 58 thousand.
Since the early 1990s, the proportion of 50 to 65-year-olds has grown from 24 to 32 percent. This process is expected to continue until the early 2020s, when nearly 37 percent of the potential labour force will be 50 years or older.

Substantial increase 60 to 65-year-olds

In the near future, the share of 60 to 65-year-olds will increase relatively fast. In 2006, the first baby boomers – born in 1946 – will reach the age of 60. Until 2011, the number of people in the 60-65 age group will increase by 175 thousand to 1.1 million. Though rated among the potential labour force, only one fifth of them are currently active.

Number of over-65s continues to grow

The Dutch population increase is only marginal, but the number of older people is growing relatively fast. Since the turn of the century, the number of over-65s has risen by 215 thousand (10 percent) to 2.4 million. The proportionally fastest growing category were people over 80. Their number increased from 500 thousand to 601 thousand.

Emigration up, mortality down

The reduction of the potential labour force in 2006 is partly due to the fact that emigrants outnumbered immigrants. Negative net migration amounted to more than 31 thousand. The majority of them are aged between 20 and 65.
The increase in the number of over-65s in 2006 is reinforced by a marginally lower mortality rate. The mortality rate began to fall in 2003, which is rather surprising, given the ageing of the population. Around the year 2050, annual mortality is anticipated to be 83 thousand up on 2006.