OIT - Employment and Social Trends 2026

Employment and Social Trends 2026 World of Work SeriesX Employment and Social Trends 2026 International Labour Office • Geneva World of Work SeriesProduced by the Publications Production and Publishing Management Unit (PRODOC) of the ILO.

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ISBN: 9789220430552 (print); 9789220430569 (web PDF)

ISSN: 3106-941X (print); 3106-9428 (web) DOI: https://doi.org/10.54394/AHRT2681 labour market analysis / employment / unemployment / economic conditions / international trade

13.01.1 ILO Cataloguing in Publication Data Also available in French: Tendances sociales et de l’emploi 2026, Série Monde du travail, ISBN 9789220430576 (print), 9789220430583 (web PDF); and in Spanish: Tendencias Sociales y del Empleo 2026, Serie El Mundo del Trabajo, ISBN 9789220430590 (print), 9789220430606 (web PDF). The designations employed in ILO publications and databases, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the ILO concerning the

9789220430606 (web PDF). The designations employed in ILO publications and databases, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the ILO concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers or boundaries.

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The opinions and views expressed in this publication are those of the author(s) and do not necessarily reflect the opinions, views or policies of the ILO. Reference to names of firms and commercial products and processes does not imply their endorsement by the ILO, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. Printed in Switzerland.III The global economy and global labour markets have proven to be more resilient than was expected at the beginning of last year. Although 2025 was characterized by high levels of economic uncertainty, the effects have not yet manifested in the labour market. Unfortunately, as Employment and Social Trends 2026 indicates, there has been little progress made in reducing widespread decent work deficits. Economic and trade policy uncertainty continues to inhibit investment and trade, impeding productivity growth and the creation of quality jobs. At the same time, the anticipated benefits from new technologies such as artificial intelligence have yet to materialize in aggregate productivity figures. While the global unemployment rate is projected to remain at the historically low level of 4.9 per cent in 2026, around 284 million workers still live in extreme poverty – on less than US$3 a day – and more than 2 billion workers remain in informal employment. Worryingly, the number of working poor and informal workers is rising in low-income countries, highlighting a lack of progress where it is needed most. Gender gaps also remain widespread throughout the world of work, with limited advances in only a few areas, such as the reduction in contributing family work. Regaining progress appears a daunting task amid the challenges looming over the world of work. Economic transformation towards activities with higher productivity and employment

lack of progress where it is needed most. Gender gaps also remain widespread throughout the world of work, with limited advances in only a few areas, such as the reduction in contributing family work. Regaining progress appears a daunting task amid the challenges looming over the world of work. Economic transformation towards activities with higher productivity and employment quality – a key driver of progress on decent work – has slowed down. In particular, low-income countries face significant constraints to transforming their economies by integrating in global supply chains when global trade growth has been reduced. While the potential widespread adoption of artificial intelligence might enhance productivity growth, it also raises uncertainty for enterprises and workers alike and, depending on how it is governed, could cause major disruptions in labour markets. Demographic change also has profound implications for labour markets. While ageing societies in high-income countries will tend to result in a shrinking labour force, many low-income countries will struggle to generate jobs of sufficient quality for the large cohort of young people entering the labour market. Finally, rising government debt levels across the world are increasing the risk of debt crises, with the related risk of severe adverse implications for employment and social outcomes in the affected countries. Especially in these turbulent times, relying on economic growth alone is insufficient to deliver meaningful progress in decent work. Governments, employers and workers must act together to develop and promote strategies that reduce decent work deficits and promote social justice. Gilbert F. Houngbo ILO Director-General ForewordV Foreword III Abbreviations X Acknowledgements XI Executive summary: Steadiness amid high uncertainty XIII

1. Global trends and outlook 1

Key messages 1 Resilient growth amid high uncertainty 2 Elevated uncertainty and falling confidence 2 Risks to the global labour market outlook 4 Trends and outlook in access to employment 6 Unemployment and youth not in employment, education or training 6

Employment and labour force 8 Gender gaps in access to employment 9 Changing labour market prospects of youth and workers with advanced education 10 Employment quality 13 Trends in working poverty, informality and status in employment 13 Drivers of the slowdown in employment quality improvements 15 Productivity growth and labour incomes 17 References 20

2. Employment and social trends by region 25

Key messages 25 Africa 26 Labour market trends in Northern Africa 26 Labour market trends in sub-Saharan Africa 28 Prevalence of young people not in employment, education or training in Africa 28 Americas 29 Labour market trends in Latin America and the Caribbean 30 Labour market trends in Northern America 30 Regional labour migration policy to help address skills gaps in the Caribbean Community region 32 ContentsX Employment and Social Trends 2026 | World of Work Series VI Arab States 33 Labour market trends in the Arab States 33 Dual-speed digital transition in the Arab States could widen inequalities 34 Asia and the Pacific 36 Labour market trends in Asia and the Pacific 36 The dual challenge of climate risk and greenhouse gas emissions in Asia and the Pacific and the implications for green job growth 40 Europe and Central Asia 41 Labour market trends in Europe and Central Asia 41 Ageing populations in Europe and Central Asia 43 References 45

3. Shifting patterns of trade and employment 51

Key messages 51 Introduction 52 Trends in trade, foreign direct investment and employment 52 Trends in international trade in a context of trade policy uncertainty 52 Dwindling foreign direct investment 54 Employment linked to foreign demand through global supply chains 56 Decent work in global supply chains 58 Shifting composition and regional patterns of trade and employment 59 The rise of services in international trade 60 Rising number of services jobs depending on foreign demand 62 Shifting regional patterns of trade 64 Rising trade among middle-income countries 64 Employment related to intraregional supply chains 65 Conclusion 66 References 67 Appendices 73 Appendix A. Geographical regions and income groups of ILO modelled estimates 73

Shifting regional patterns of trade 64 Rising trade among middle-income countries 64 Employment related to intraregional supply chains 65 Conclusion 66 References 67 Appendices 73 Appendix A. Geographical regions and income groups of ILO modelled estimates 73 Appendix B. Estimation of the change in return to skilled and unskilled labour due to rising trade uncertainty 76VII List of boxes 1.1. Unemployment and public debt crises 5 1.2. Estimation methodology for youth unemployment rates by sex and education 11 1.3. Decomposing the change in the global incidence of employee status and informality 17 3.1. Implications of trade uncertainty for labour incomes 53 3.2. Estimating employment linked to foreign demand 57 3.3. Digitally delivered services trade 60 List of figures 1.1. Uncertainty indices, January 2010 to October 2025 2 1.2. Business and consumer confidence indicators, 2005–25 3 1.3. Job vacancies in 19 countries with available data, 2001–25 4 B1.1. Unemployment rate following a debt crisis (4 years before debt default = 100) 5 1.4. Share of youth not in employment, education or training by country income group, 2005–27 (percentage) 7 1.5. Employment growth by country income group, 2010–27 (percentage) 9 1.6. Gender gaps in selected labour market indicators by subregion 2026 (percentage point difference in rates) 10 1.7. Youth unemployment rate by sex, education level and country income group, 2024 (percentage) 11 1.8. Youth unemployment rate in upper-middleand high-income countries by education degree, 2005–24 (percentage) 12 1.9. Share of employment exposed to AI by age, educational attainment and country income group (percentage) 13 1.10. Difference in employment distribution across economic activities, 2005–15 and 2015–25 (percentage point) 16

degree, 2005–24 (percentage) 12 1.9. Share of employment exposed to AI by age, educational attainment and country income group (percentage) 13 1.10. Difference in employment distribution across economic activities, 2005–15 and 2015–25 (percentage point) 16 1.11. Decomposition of changes in the global informality rate, 2005–15 and 2015–25 (percentage) 16 1.12. Decomposition of changes in the global share of employees in total employment, 2005–15 and 2015–25 (percentage) 17 1.13. Growth of GDP per worker by subregion, 2026 (percentage) 18 1.14. GDP growth and its decomposition by country income group, 2026 (percentage) 19 2.1. Share of youth (aged 15–24) not in employment, education or training, Africa and subregions, 2005–25 (percentage) 28 2.2. Net movement within CARICOM and GNI per capita by CARICOM Member State 32 2.3. Share of employment in Arab States with augmentation and automation potential from generative AI (percentage) 36X Employment and Social Trends 2026 | World of Work Series VIII 2.4. Manufacturing as a share of total employment, selected regions, 2000–25 (percentage) 39 2.5. Impact of demography and the employment rate on average annual GDP growth in Europe and Central Asia by region, 2024–50 (percentage point) 44 B3.1.1. Average annual change in return to labour, relative to baseline, between 2025 and 2035 (percentage) 54 3.1. Trade in goods and services by country income group, 2000–26 55 3.2. Foreign direct investment inflows as a share of GDP by country income group, 2007–24 (percentage) 55 3.3. Share of employment linked to trade by region, 1995–2024 (percentage) 56 3.4. Employment linked to trade per region as a share of total employment across all regions,

(percentage) 55 3.3. Share of employment linked to trade by region, 1995–2024 (percentage) 56 3.4. Employment linked to trade per region as a share of total employment across all regions, 1995–2024 (percentage) 57 3.5. Average incidence of employment characteristics in trade compared to non-trade-related employment by country income group, 2024 (percentage point) 58 3.6. Trade in goods and services as a share of global GDP, 1990–2024 (percentage) 60 B3.3.1. Total digitally delivered services exports by region, 2005–24 (2005 = 100) 6 1 3.7. Exports of goods and services at constant prices by country income group, 2024 (2008 = 100) 61 3.8. Share of employment linked to foreign demand within sectors by country income group, 2024 (percentage) 62 3.9. Employment linked to foreign demand of output from manufacturing, market services and rest of economy as a share of total employment linked to foreign demand by sector and country income group, 1995, 2008 and 2022 (percentage) 63 3.10. Global trade flows by value by country income group, 2005, 2015 and 2024 (percentage) 64 3.11. Regional Cooperation and Integration Index by region, 2006–22 65 3.12. Share of trade-related employment dependent on intraregional trade relations by region, 1995–2022 (percentage) 66IX List of tables 1.1. Unemployment rate and number of unemployed by age, sex and country income group, 2024–27 (percentage and million) 7 1.2. Labour force and labour force participation rate by country income group, 2024–27 (million and percentage) 8 1.3. Type of employment as a share of total employment by sex and country income group, 2005–25 (percentage) 14 2.1. Estimates and projections for employment, unemployment, the labour force, informal

(million and percentage) 8 1.3. Type of employment as a share of total employment by sex and country income group, 2005–25 (percentage) 14 2.1. Estimates and projections for employment, unemployment, the labour force, informal employment and working poverty, Africa and subregions, 2015–27 (percentage and million) 27 2.2. Estimates and projections for employment, unemployment, the labour force, informal employment and working poverty, Americas and subregions, 2015–27 (percentage and million) 3 1 2.3. Estimates and projections for employment, unemployment, the labour force, informal employment and working poverty, Arab States and subregions, 2015–27 (percentage and million) 35 2.4. Estimates and projections for employment, unemployment, the labour force, informal employment and working poverty, Asia and the Pacific and subregions, 2015–27 (percentage and million) 37 2.5. Estimates and projections for employment, unemployment, the labour force and informal employment, Europe and Central Asia and subregions, 2015–27 (percentage and million) 42 A1. ILO geographical grouping of countries and territories 73 A2. Grouping of countries and territories by ILO subregion 74 A3. Grouping of countries and territories by income level 75AI artificial intelligence ADB Asian Development Bank CARICOM Caribbean Community FDI foreign direct investment GCC Cooperation Council for the Arab States of the Gulf LFPR labour force participation rate NEET not in employment, education or training ODA official development assistance OECD Organisation for Economic Co-operation and Development PPP purchasing power parity TPU trade policy uncertainty WTO World Trade Organization Abbreviations X X Employment and Social Trends 2026 | World of Work SeriesXI Employment and Social Trends 2026 was prepared by the Macroeconomic Policies and Jobs Unit of the ILO Research Department. The report was written by Marva Corley-Coulibaly, Ekkehard Ernst, Richard Horne, Stefan Kühn, Iuliia Privalikhina and Miguel Sanchez Martinez, under the

Employment and Social Trends 2026 was prepared by the Macroeconomic Policies and Jobs Unit of the ILO Research Department. The report was written by Marva Corley-Coulibaly, Ekkehard Ernst, Richard Horne, Stefan Kühn, Iuliia Privalikhina and Miguel Sanchez Martinez, under the overall coordination and leadership of Stefan Kühn. Ekkehard Ernst supervised the process. The authors also acknowledge contributions by David Bescond, Sajid Ghani, Fabiola Mieres and Professor Dandan Zhang. The report was produced under the overall guidance of Caroline Fredrickson, Director of the ILO Research Department. The authors are grateful for all the input and suggestions received from the ILO Regional Offices for Africa, Arab States, Asia and the Pacific, Europe and Central Asia, and Latin America and the Caribbean. The ILO modelled estimates presented in this report were produced by the Data Production and Analysis Unit, led by Steven Kapsos, of the ILO Department of Statistics, and by the Macroeconomic Policies and Jobs Unit of the ILO Research Department. The authors especially acknowledge the modelling work carried out by Evangelia Bourmpoula, Paloma Carrillo, Marta Golin, Roger Gomis, Stefan Kühn, Avichal Mahajan, Miguel Sanchez Martinez and Rémi Vine. The underlying database of international labour market indicators used to produce the estimates was prepared by the Data Production and Analysis Unit. The authors also wish to acknowledge the efforts of Hamidreza Bakhtiarizadeh, David Bescond, Vipasana Karkee, Donika Limani, Sandra Mora Caballero and Yves Perardel. The ILO Research Department wishes to acknowledge the comments and suggestions provided by the following ILO colleagues: Uma Rani Amara, Christina Behrendt, Adelle Blackett, Paloma Carrillo, Juan Chacaltana, Sabrina de Gobbi, Giulia De Lazzari, Sara Elder, Najati Ghosheh, Steven Kapsos, Gerson Martinez, Mansour Omeira, Mariana Pereira, Celine Peyron Bista, Shahrashoub

Carrillo, Juan Chacaltana, Sabrina de Gobbi, Giulia De Lazzari, Sara Elder, Najati Ghosheh, Steven Kapsos, Gerson Martinez, Mansour Omeira, Mariana Pereira, Celine Peyron Bista, Shahrashoub Razavi, Pelin Sekerler, Steven Tobin, Rosalia Vazquez-Alvarez, Rie Vejs-Kjeldgaard, Sher Verick, Stéphanie Villadiego De La Hoz and Zhiming Yu. The authors also thank colleagues from the ILO Bureau for Employers’ Activities and ILO Bureau for Workers’ Activities for their excellent comments and suggestions. We would like to express our gratitude to Judy Rafferty and our colleagues in the ILO Publications Production and Publishing Management Unit for providing production project management, graphic design including the cover, copy-editing, typesetting and proofreading, and to Alessandro Ippolito Neira and our colleagues in the ILO Department of Communication and Public Information for their continued collaboration and support in disseminating the report. AcknowledgementsProgress in employment quality has stalled Globally, improvement in the quality of employment has slowed over the past two decades. Between 2015 and 2025, the share of workers living in extreme poverty declined by only 3.1 percentage points, to 7.9 per cent, compared with a decline of 15 percentage points in the previous decade. This leaves 284 million workers living in extreme poverty – that is, less than US$3.00 a day. Moreover, both extreme and moderate working poverty rates increased in low-income countries between 2015 and 2025, with almost 68 per cent of workers living in extreme or moderate poverty in 2025. The global rate of informality increased by 0.3 percentage points between 2015 and 2025, after having declined in the previous decade. By 2026, 2.1 billion workers globally are projected to be informally employed. Informality is typically associated with lower

The global rate of informality increased by 0.3 percentage points between 2015 and 2025, after having declined in the previous decade. By 2026, 2.1 billion workers globally are projected to be informally employed. Informality is typically associated with lower job quality due to limited access to social protection, rights at work, workplace safety and job security. This increase largely reflects the growing share of employment in countries with higher rates of informality, chiefly in Africa and Southern Asia, making efforts to reduce informality in these economies critical. In addition, the incidence of own-account work, which in lowand middle-income countries is often low paid and undertaken out of necessity, rose again between 2015 and 2025. The slowdown in the transformation of economies towards sectors with more productive workers and better working conditions acts as a major roadblock in ensuring steady progress in narrowing decent work deficits. The process of workers moving across economic activities over time has halved globally over the last two decades. The slowing transition of workers towards sectors with higher formality and employee status is not only a major driver of the global deceleration in improvements in work quality but also of weakening productivity growth. Unemployment shows no signs of change, albeit looming risks exist The global economy and labour markets remain resilient in the face of heightened uncertainty and an evolving policy landscape. Projected GDP growth for 2025 to 2027 has barely changed compared to the outlook in 2024. In 2025, trade diversion and rerouting helped cushion the immediate impact of trade disruptions, while businesses and households front-loaded consumption and investment, which Executive summary Steadiness amid high uncertainty XIIIX Employment and Social Trends 2026 | World of Work Series XIV boosted activity in the first half of the year. Whereas higher uncertainty and lower business and consumer confidence can weigh on aggregate demand, falling inflation, supportive fiscal and monetary policy, and investment into artificial intelligence (AI) technologies are all expected to

XIV boosted activity in the first half of the year. Whereas higher uncertainty and lower business and consumer confidence can weigh on aggregate demand, falling inflation, supportive fiscal and monetary policy, and investment into artificial intelligence (AI) technologies are all expected to support growth in 2026. Yet, the outlook continues to include significant risks relating to mounting sovereign debt, trade policy uncertainty and AIdriven disruptions. The materialization of these risks could have non-negligible consequences not only on the employment growth prospects but also on key dimensions of work quality, such as informality, working poverty and real wages. Slower labour force growth amid demographic shifts is stabilizing unemployment rates despite weak employment growth. The global labour force participation rate is projected to decline by around 0.2 percentage points each year, reaching 60.5 per cent in 2027. This structural downward trend, driven in part by the growing number of retirees as populations age, has accelerated once again due to the halt in the moderating effect of rising participation rates for women in lower-middleand high-income countries between 2015 and 2025. The global unemployment rate was estimated at 4.9 per cent in 2025, unchanged from 2024, and is projected to remain at a similar level until 2027. Global unemployment is forecast to reach 186 million in 2026, while the broader measure of labour underutilization – the jobs gap – is projected at 408 million. Regional patterns vary, with Latin America and the Caribbean poised to further reduce its overall unemployment rate in the medium term, whereas unemployment in Northern America is expected to worsen. Global employment growth, projected at 1.0 per cent in 2026, is slightly below the average of the preceding decade, with demographic shifts accounting for significant variation across countries. Employment is forecast to decline in high-income countries in 2026, a

Global employment growth, projected at 1.0 per cent in 2026, is slightly below the average of the preceding decade, with demographic shifts accounting for significant variation across countries. Employment is forecast to decline in high-income countries in 2026, a sharp turnaround following the 1.1 per cent average annual growth in the decade 2010 to

2019. Upper-middle-income countries are set to experience relatively low employment growth of 0.5 per cent due to demographic change, while lowermiddle-income countries are projected to reach 1.8 per cent. Thanks to strong population growth and a large youth cohort entering the labour market, employment in low-income countries is expected to grow at 3.1 per cent in 2026, following an average growth rate of 2.3 per cent from 2010 to 2019. However, weak productivity growth and a shortage of decent work opportunities risk preventing these countries from capitalizing on a potential demographic dividend.

In 2025, women represented only two fifths of global employment, indicating significant barriers to accessing employment. Women were 24.2 percentage points less likely than men to be in the labour force, while young women were 14.4 percentage points more likely than young men not to be in employment, education or training (NEET). The global unemployment rate for women is only slightly above that of men, indicating that they primarily face barriers to accessing the labour market rather than to finding a job. In addition, the jobs gap rate continues to be higher for women relative to men, with an anticipated gap of 4.3 percentage points in 2026. Gender gaps vary greatly by region, but much less so by country income group, highlighting the role of social norms and stereotypes in shaping these patterns. Furthermore, gender gaps have not narrowed in indicators such as the incidence of contributing family work and the proportion of workers living in extreme poverty.

gaps vary greatly by region, but much less so by country income group, highlighting the role of social norms and stereotypes in shaping these patterns. Furthermore, gender gaps have not narrowed in indicators such as the incidence of contributing family work and the proportion of workers living in extreme poverty. Productivity and labour income growth are insufficient to advance decent work Growth in both GDP and labour productivity continues to underperform in low-income countries, hindering progress in reducing decent work deficits. High population growth, combined with lackluster productivity gains, is slowing the convergence of living standards in low-income countries towards those observed in more advanced economies. Regional patterns vary, with labour productivity growth projected to be lowest in Latin America and the Caribbean, at 1.0 per cent, and highest in Southern Asia, at 3.9 per cent in 2026. With appropriate labour market institutions, gains in productivity generally lead to higher wages and, over time, contribute to stronger employment growth. Growth in global real wages and labour income remains insufficient to offset the real income losses caused by the surge in inflation in 2022 to

2024. The global labour income share, at 52.6 perXVExecutive summary: Steadiness amid high uncertainty cent in 2025, remained below its 2019 level of 53.0 per cent, indicating that real wage growth has not kept up with labour productivity growth. Even though aggregate real wages in 2024, measured using the consumer price index, were below their 2019 level in high-income countries, producers faced higher real labour costs in terms of the producer price index.

Challenging labour market conditions for youth could be compounded by AI adoption Labour market conditions for young people remain problematic, especially in low-income countries. In 2025, the global youth unemployment rate crept up to 12.4 per cent, from 12.3 per cent in 2024, while the share of youth with NEET

compounded by AI adoption Labour market conditions for young people remain problematic, especially in low-income countries. In 2025, the global youth unemployment rate crept up to 12.4 per cent, from 12.3 per cent in 2024, while the share of you