When the Expert Group’s assumptions regarding labour force participation rates are applied to the relevant population projection, the labour force is projected to increase under each of the scenarios.
Under M1 (which assumes net inward migration from 2023 to 2037, starting at 75,000 per annum in 2023 and tapering to 45,000 per annum by 2027), the labour force is projected to increase by just over 610,000 (22.6%) by 2037 to 3,307,000 persons. This represents an annual average increase of around 40,700 persons or an increase of 1.5% per annum in the labour force over the fifteen years, evenly divided between the male and female components.
The labour force is projected to increase by just over 485,000 (18.0%) to 3,182,100 persons by 2037 under the medium net inward migration scenario M2 (which assumes net inward migration from 2023 to 2037, starting at 75,000 per annum in 2023 and tapering to 30,000 per annum by 2032) and by 337,200 (12.5%) persons under M3 (which assumes net inward migration from 2023 to 2037, starting at 75,000 per annum in 2023 and tapering to 10,000 per annum by 2032). The M2 scenario results in an average annual increase of 1.2% in the labour force while under M3 the labour force is projected to increase by 0.8% annually. See table 3.1, 3.2 and fig 3.1.
The average projected annual growth for 2022 to 2037 for all three scenarios is less than that achieved during 2011 to 2022. This is due both to the fact that the period 2011- 2022 saw strong growth in labour force participation, with 2022 seeing one of the lowest unemployment rates in our history, and also due to our population demography shifting to an ageing population. See table 3.2.
The projected labour force is also expected to see a rise in numbers aged 60 years and over. In 2022, 10.1% of the labour force consisted of people aged over 60. Under the M1 assumption this is set to rise by 2.8% to 12.9% of the labour force being aged 60 and over. Under M2 it is projected that we will see 13.2% of the labour force being aged 60 and over. Under the M3 scenario we expect to see an increase of almost 3% from 2022 to 2037 to 13.7%. See figure 3.2, 3.3 and 3.4 for projected age group breakdown of labour force.
The increased participation of those aged 60 and over is primarily due to Irelands changing demographic structure. The difference in percentage participation at these higher ages is due to a lower number of inward migrants in the M3 scenario, as compared to the M1 and M2 scenarios. The projected increased labour force participation rates for people aged 60 and over also reflect increases in the retirement age.
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