Workers aged 65 and over can make an ever greater contribution to securing the supply of skilled labour in Germany. They continue to grow as a proportion of the population and are increasing gainfully employed. While only 5.0 per cent of 65- to 74-year-olds were employed in the year 2005, by 2013 this share had risen to 8.7 per cent and thus slightly exceeded the EU average. However, there are considerable regional differences, with the share of those employed in 2012 varying between 10.5 per cent in Baden-Wurttemberg and 3.6 per cent in Mecklenburg-West Pomerania. There also are substantial differences between the sexes. While 10.2 per cent of 65- to 74-year-old men were employed in 2012, this applied to only 5.5 per cent of the women. Factors with a significant influence on the probability of those between the ages of 65 and 74 remaining active in the workforce include a high level of educational qualifications, a highly skilled expert or management position and especially self-employment. There is a concomitant positive correlation between net household income and the likelihood of remaining active in the workforce. In 2012, 24.3 per cent of 65- to 74-year-olds with a net household income exceeding 4,500 euros were employed but only 4.9 per cent of those with an income of less than 1,100 euros. Today, gainful employment among the elderly is thus less a result of a low pension than of good job and earning prospects:
The German labor market is on the verge of a fundamental upheaval. While the number of people in the labor force has risen steadily in recent decades, it is likely to drop significantly as soon as the baby boomers retire.
The demographic transition is confronting Germany with a growing shortage of skilled workers. In a simple, static labor market model, wages in occupations where the demand for labor is high should rise at an above-average rate to restore market equilibrium.