Delayed retirements quietly drive the euro area employment boom

The demographic engine

Between the first quarter of 2022 and the end of 2025, the total employment rate in the euro area increased by 1.7 percentage points, reaching approximately 62%. During this period, individuals aged 55 to 74 were responsible for 1.4 percentage points of that total increase, even though they represented only 34% of the working-age population. In comparison, workers aged 25 to 54 contributed 0.7 percentage points, while the contribution from those aged 15 to 24 was zero.

The European Central Bank notes that the pure demographic effect of an ageing population over this period should have reduced the employment rate by 0.4 percentage points. Instead, the workforce expanded. More than 90% of the employment gain among older workers resulted from an increase in their labour force participation rate, rather than a drop in unemployment within that group.

Source institutions：European Central Bank

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