World Employment and Social Outlook: Trends 2025

Increasing food prices, high sovereign debts and geopolitical tensions have affected economic growth in developing countries, the report states. Growth registered in many Asian and African countries is not enough to provide enough productive jobs for the youth entering the labour market.

In 2024, the global labour force participation rate (LFPR) stayed at 61 per cent, halting a long-term fall in participation. However, the rate showed much variation across regions. Low-income, upper-middle-income and high-income countries saw a decline in their LFPRs, for different reasons. Middle-income countries saw an increase, largely because of the rise in female rural labour force in India. This rise is unlikely to be reflected in India’s GDP much of this rise includes women contributing to family work, the report adds.

The post covid-19 economic recovery did not impact youth unemployment as it did total unemployment. The unemployment figures remained significantly higher than adult rates at 12.6 per cent in 2024. Additionally, the share of young women not in education, employment or training (NEET) in 2024 was 28.2 per cent was more than double than of young men at 13.1 per cent.

Jobs in renewable energy sector have been rising, from 13.7 million in 2022 to 16.2 million in 2023 but with an uneven regional spread. China accounted for 46 per cent of overall jobs in the renewable sector. The sector is also gender biased with women making up only 32 per cent of the total workforce.

The report identifies two distinct groups of countries with regards to a changing workforce and spatial inequality. Inequality has decreased in China, Bangladesh, South-Eastern Asia and Eastern Africa (except Ethiopia) with a corresponding increase in manufacturing. The other group made up of India, Europe and some Latin American countries have also seen a drop in inequality even without an increase in manufacturing. These countries, however, have seen a rise in the workforce in the modern services sector.

Poor quality work, including informal work, undermine employment and unemployment estimates, the report notes. In periods of low growth when formal employment decreases, people are forced to take informal opportunities without guaranteed pay or other benefits. Their situations are worse in the absence of social protection measures. In Africa, only 19.1 per cent people had access to at least one social protection benefit. The figures were a little higher in the Arab states at 30 per cent, followed by 53.6 per cent in Asia and the Pacific, and 68.2 per cent in the Americas.

Data from the United Nations Department of Economic and Social Affairs, in 2020, about 28.3 million Africans lived outside of their country of origin. Many of them sent money back to their families, these remittances becoming a major source of private money in their home countries. Several countries are working to formalise and increase this flow of capital.

The report states that long-term structural issues like inequality, poverty and low productivity hamper economic growth prospects in Latin America. Data from 2023 showed that more than half of Latin American and Caribbean countries had poverty levels higher than pre-pandemic levels, the situation worsened by a reduction in real incomes due to inflation.

In North America, skill mismatches and an ageing population is expected to contribute to increasing labour shortages, the report notes. However, targeted skilled immigration campaigns in Canada and the United States of America, begun to reduce this gap, are now facing opposition within the countries.

In Arab countries, the youth population accounted for about 40 per cent of all unemployed individuals, mainly due to lack of opportunities for young people. The report also adds that the youth unemployment rate is at 27.5, more than four times the unemployment rate for adults, which is at 6.8 per cent. This is in part due a lack of jobs for higher-skilled graduates and the inability of the education system to properly equip students with skills demanded in the current market.

Although Europe’s economic growth has been steady, it has been slowest in the North, West and South of the continent. Labour shortages here are mostly driven by skill and job mismatches in science, engineering, mathematics, information and communication technologies, and healthcare. This is especially evident in Norway, Denmark, Germany, France, the Netherlands and Belgium as of 2023. Some of these issues are temporary, the report notes, while others such as increasing demand in the renewable energy sector needing particular new skills, will be more long term.

Focus and Factoids by Anusha Parthasarthy and Aditya Prem Kumar.