Taiwan is facing a worsening demographic crisis with the impending retirement of more than half of its current workforce over the next 15 years, according to a report from the Ministry of Interior last week. The news comes as the country reported its 19th straight month of population decline.
The government projects that 6.67 million will retire in two waves by 2040, representing a significant portion of Taiwan’s current labour force of 11.6 million. Last year, the number of Taiwanese aged 15 and above was 20.2 million.
Older generations continue to be a substantial part of Taiwan’s workforce. The Directorate General of Budget, Accounting and Statistics (DGBAS) reported that people aged 50-54 had a 78.4% labor participation rate last year, while those aged 55-59 were at 62.2%.
In stark contrast, data from the Ministry of Labor shows that the labor participation rate for Gen Z workers aged 15-29 was significantly lower at just 38%. DGBAS estimates that over 1.5 million young Taiwanese are unemployed because they are pursuing education or preparing for exams. Analysts have also noted a growing preference for four-year university programs over technical colleges, which could delay their entry into the labor market.
Female workers are another crucial element of Taiwan’s labour woes. A 2024 study found that the labor force participation rate for Taiwanese women peaks between ages 25-29 and then steadily declines, with marriage and family obligations cited as primary factors. By age 60, the participation rate for women drops to about 26% — roughly half the rate of regional peers like Japan and South Korea — and nearly vanishes after age 65.
Recent DGBAS data also revealed that the percentage of workers earning less than the average monthly salary rose to 68.6% in 2022, contributing to a sense of economic struggle for many Taiwanese. This is coupled with the country’s labor share of income being considerably lower than the capital share, a trend observed in other developed economies.