World Labor Force Growing at Divergent Rates

Elizabeth Leahy Madsen | Oct 19, 2011

The world’s potential labor force—measured as men and women between the ages of 15 to 64—stands at 4.6 billion people in 2011, up 17 percent over the last decade.1 The potential labor force has tripled since 1950, and people of working age now account for nearly 66 percent of the total population—the highest ratio since 1950.2 (See Figure 1.) This ongoing growth in the potential labor force has both positive and negative implications: there are more potential workers to drive economic expansion, but the number of available jobs may not keep pace. Given the current economic downturn, the International Labor Organization (ILO) estimates that the ranks of the unemployed reached 205 million people in 2010—a global unemployment rate of roughly 6 percent.3

While the overall picture is one of continued but slowing growth in the potential labor force, and hence a growing need to maintain employment rates worldwide, trends are heading in quite disparate directions in different regions and countries. In developing countries, where women have on average nearly three children, the potential labor force has grown much more rapidly since 1950.4 Growth of 270 percent in these regions has far surpassed the rate of nearly 60 percent in industrial countries, where fertility rates on average are already lower than the replacement level needed to sustain a population at a steady level.5 This is reflected in the disparities between the proportional size of regional labor forces and economies. The high-income countries are home to 16 percent of the world’s potential labor force, yet they produce more than two thirds of the world’s gross domestic product.6 Meanwhile, nearly one quarter of the world’s potential labor force lives in South Asia, but the region’s share of the global economy is just over 3 percent.7 (See Figure 2.)

The labor force is called “potential” because not everyone between the ages of 15 to 64 holds a job or earns income, for reasons such as schooling, child or elder care, unemployment, social custom, early retirement, or poor health or disability. The ILO calculates the difference between the size of the potential labor force and the economically active population, which is also known as the labor force participation rate.8 For the world as a whole, there are 3.2 billion economically active people age 15 to 64 in 2011, or about 70 percent of the potential labor force.9 Fewer women than men are active in the labor force; this “gender gap” is largest in the Middle East and North Africa and in South Asia and it is smallest in high-income countries and in East Asia and the Pacific.10

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