Global Labour Market in 2025: Recovery Amid Persistent Challenges

The year 2025 unfolds against a backdrop of continued transformation in global labor markets. Since the COVID-19 pandemic, a confluence of factors, including rising living costs, geopolitical conflicts, the climate crisis, and economic downturns, has exacerbated the turbulence already present in technology-driven employment shifts. While the global economy shows signs of stabilization, growth projections remain muted at 3.2% for the year. Inflation has eased to a projected 3.5% by year-end, falling below the average global inflation rate of the early 21st century. However, elevated living costs continue to affect populations worldwide.

Global unemployment stands at 4.9%, its lowest level since 1991, supported by improved economic stability and reduced inflation. Yet this headline figure conceals disparities. Middle-income countries are experiencing declining unemployment rates, while low-income countries have seen an increase from 5.1% in 2022 to 5.3% in 2024.

Gender disparities in unemployment persist. Although the global unemployment rate peaked for both sexes at 6.6% in 2020, men have seen a sharper decline in unemployment (now 4.8%) compared to women (5.2%). Lower-middle-income countries, where female unemployment rates exceed male rates by 1.1 percentage points, drive much of this disparity. High-income countries exhibit a smaller gender gap of 0.4 percentage points, but this inequality has been entrenched for over a decade. In low-income and upper-middle-income countries, male and female unemployment rates remain relatively equal.

Youth unemployment highlights another layer of labor-market challenges. At 13%, the global youth unemployment rate remains significantly higher than overall unemployment. The global rate of youth not in employment, education, or training (NEET) has stagnated at 21.7%, but disparities between income levels are stark. While high-income economies have a NEET rate of 10.1%, this figure climbs to 17.3% in upper-middle income economies, 25.9% in lower-middle income economies, and 27.6% in low-income economies.

The International Labour Organization’s (ILO) “jobs gap” metric—measuring broader unemployment and underemployment—provides further insights. The global jobs gap has been decreasing, standing at a need for 402 million additional jobs in 2024. However, low-income economies have seen their jobs gap widen by 0.4 percentage points compared to pre-pandemic levels, while lower-middle-income economies achieved the largest reduction (2 percentage points since 2019). Across all income groups, women face a higher job gap than men, with the disparity most pronounced in low-income economies, where women’s job gap exceeds men’s by 7.5 percentage points.

Labor-force participation rates have rebounded to pre-pandemic levels across most income groups, except for lower-middle-income economies. In low-income economies, labor-force participation rates have exceeded 2019 levels, driven by demographic trends. These economies, representing about 40% of the global population, are poised to account for the majority of working-age population growth in the coming years, underscoring the critical need for job creation to accommodate this expanding workforce.

The evolving global labor landscape in 2025 reflects progress in some areas while emphasizing persistent inequalities, highlighting the importance of targeted policies to address disparities and support inclusive economic growth.

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