Fertility rates have been declining for decades and are below the replacement rate in almost all OECD countries. At the same time, life expectancy is rising. These trends imply a rapid increase in the number of over 65‑year‑olds, a decline in the working-age population and increasing expenditure on pensions, health- and long-term care. Countries have responded by raising statutory retirement ages, which should be underpinned by measures enabling longer careers.

Women’s disproportionate provision of unpaid care contributes to their lower labour force participation and earnings. If formal child- and long-term care remain underprovided, unpaid long-term care obligations will likely further impede women’s employment at a time when a full workforce is essential. The share of adults living alone – with an associated higher poverty risk – is also rising.

Women’s labour force participation rate grew from 58% in 1995 to 66% in 2022, on average, across OECD countries, while the share of women working part-time is on a downward trajectory, declining from 23% in 1995 to 20% in 2022.

Men remain much less likely to work part-time than women. Nevertheless, men’s part-time rate rose from 6% to 7%, on average, since the late 1990s. Rises in part-time work were particularly striking in the Netherlands (8 percentage points), Finland (7 percentage points), and Korea, Germany and Austria (6 percentage points). Increases in part-time rates among men and women are partly driven by increasing educational enrolment of young people, but prime‑aged men’s part-time rates also increased.

Men’s part-time rates accelerated with the Great Financial Crisis (GFC), in line with indicators of underemployment. However, while underemployment fell with the economic upturn, men’s part-time rate did not return to pre‑GFC levels. Men may have curtailed work to participate in unpaid care, but this is difficult to assess with available data. Workers may also increasingly value leisure as wages increase. This is consistent with part-time work increasing most in higher-income countries. While women’s rising labour force participation alleviates labour shortages and improves their social protection entitlements, the rising incidence of part-time work among men has the opposite effect. Should this trend continue, it could depress aggregate labour supply and affect the financial stability of pension systems.

Self-employment has been on a slow decline throughout the OECD since 1950. Despite concerns that the number of independent contractors, in particular platform workers, is rising, evidence indicates that only a small share of workers are affected, and that earnings often supplement other income.

Self-employed workers have less access to social protection, and therefore often rely on general-revenue funded benefits in the event of income loss. Better aligning contributions and benefits across employment forms also helps to prevent employers lowering labour costs by choosing work arrangements with fewer social protection entitlements.

Recent advances in robotics and Artificial Intelligence (AI) have been accompanied by concerns about worker displacement. New technologies may act as labour substitutes or compliments. Technological progress is changing the occupational composition of the workforce, but there is no evidence yet pointing to net job destruction. Evidence on wages is mixed – advances in robotics seem to have somewhat depressed the wages of affected workers, while AI seems to have had a zero or slightly positive effect on wages, with workers at the lower end of the wage distribution benefiting more.

In the absence of population growth, rising productivity through technological progress is the only way to achieve long-term economic growth, which is necessary for the continued funding of public expenditure in a non-zero interest rate environment. Governments can help to ensure that workers benefit from the productivity gains and cost savings generated by AI, which will also support social protection funding that in many countries mostly relies on labour income, e.g. through education and training or by supporting collective bargaining. Countries may want to reconsider their tax mixes should technology-driven productivity growth mostly accrue to capital.

Because low-income households spend more of their income, they are more exposed to consumption taxes like carbon taxes. But because higher-income households have higher absolute expenditure (and therefore tax liability), redistributing the carbon tax revenue equally across households would make households at the bottom of the income distribution better off. To achieve public support for increases in carbon prices, compensation policies need to be immediate, transparent and of sufficient size. Countries are increasingly using new data and digital technologies to increase their capabilities to provide benefits that are easy to claim, timely and responsive to changing circumstances.

Current estimates forecast a slightly negative effect of the net-zero transition on employment. Workers in high-emission industries are, on average, more likely to have low educational attainment and participate less in life‑long learning, but earn comparatively high wages. They are more likely to be older, male, and live in rural areas than the average worker – a combination with high costs of job reallocation and risks of long-term unemployment.

Accessible and adequate unemployment insurance schemes are a first line of defence, but affected workers may require substantial re‑skilling and may face lower wages upon re‑employment. Additional income support policies may be necessary.

Adaptive home renovations require large up-front investments, and for rented homes, there is a disconnect between costs borne by landlords and benefits reaped by renters. Programmes for low-income households and renters may therefore be needed. Areas affected by the loss of brown jobs, or by environmental degradation, will likely require government support for relocation.