A shrinking workforce of 6.67 million threatens to reshape Taiwan’s economic future

The decline is driven by two waves of retirement from the country’s largest baby boom generation and compounded by persistently low birth rates. 

Taiwan’s labour market now faces both immediate and long-term pressures as older generations retire and fewer young people enter the workforce.

The first wave of retirees comes from the cohort born between 1958 and 1966, when 3.78 million births were recorded. This group began entering retirement in 2023, triggering a contraction in the labour force.

A second wave, expected in about 16 years, will include those born between 1976 and 1982, when 2.89 million births occurred, the Ministry said. Together, these two groups will reduce the working-age population by 6.67 million.

The demographic strain is compounded by persistently low birth rates, with fewer than 1.6 million people entering the workforce compared with more than 2 million retiring. “Working-age youths” were defined as individuals aged 15 and older, according to the ministry.

Older Taiwanese have low participation in the labour market, with only 10% of those aged 65 and above remaining employed, compared with 25 to 35% in South Korea, Japan, and Singapore. Younger workers are also slower to enter the workforce, as labour force participation among those aged 15 to 29 is only 38%, well below the 60% seen in Europe and the US.

A Ministry of Labour study noted that more than 196,000 university and college graduates have yet to register for labour insurance, excluding those serving in the military, working abroad, or farming. Suggesting that many young Taiwanese are struggling to find employment or remain inactive at home.

According to United Nations data, the number of people aged 65 or older worldwide is expected to more than double from 761 million in 2021 to 1.6 billion by 2050. The population aged 80 and above is growing at an even faster rate. In 2021, one in ten people globally was aged 65 or older; by 2050, that figure is projected to rise to one in six.

Just days ago, Japan, the country with the oldest population, reported a record number of centenarians, with 99,763 people aged 100 or older as of September 1. This marked the 55th consecutive annual increase. 

Northern Africa, Western Asia, and sub-Saharan Africa are projected to record the fastest growth in older populations over the next three decades, the UN said.

Taiwan’s total population has been shrinking for 19 consecutive months. At the end of July, government data showed the population stood at 23,337,936, down 8,805 from June and 71,387 from a year earlier.