Domestic potential to combat skills shortages: Can unemployed people over 50 and women in mini-jobs make labor migration unnecessary?

A calculation without considering the host: Why the “domestic potential” cannot replace immigration, but could drastically reduce it

Germany is caught in a fatal dilemma: While the economy is desperately searching for skilled workers and politicians are frantically concluding recruitment agreements with foreign countries, millions of unused labor reserves are slumbering right on our doorstep.

The forecasts are bleak: By 2035, the German labor market could be short up to seven million people. The standard political response is almost reflexively: “We need more immigration.” But this one-sided focus ignores two crucial factors. First, the enormous, untapped potential within Germany – from hundreds of thousands of experienced unemployed people over 50 to millions of well-educated women trapped in the system of mini-jobs and part-time work. And second, the moral bankruptcy that accompanies one of the world's richest industrialized nations poaching medical personnel from countries whose own healthcare systems are on the verge of collapse.

Do we really need to bring in caregivers from Africa when we can't even manage to convert mini-jobs into secure full-time employment at home? Is the skilled worker shortage a matter of fate or the result of decades of political complacency? A sober analysis of the figures shows that while domestic potential might not completely close the gap, it could drastically reduce the need for ethically questionable labor migration – if we dared to tackle "sacred cows" like joint taxation for married couples or early retirement without deductions.

The following analysis dissects the calculations of the Federal Employment Agency, the IAW and leading economic institutes, revealing the true size of the “hidden reserve” and why the solution must be “reform before recruitment” rather than “domestic or foreign”.

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The question sounds deceptively logical at first glance: If Germany has hundreds of thousands of experienced unemployed people over 50 and millions of women in mini-jobs and part-time work, why is it even necessary to import skilled workers from abroad? The answer is: The domestic potential is enormous, but mathematically it isn't enough to completely close the demographic gap. However, it could cover a significantly larger share than before if the political will were there. And yes, the ethical dimension of labor migration from countries that themselves suffer from an acute shortage of skilled workers is criminally neglected in Germany.

The scale of the gap: Seven million by 2035

To realistically assess the potential, the scale of the problem must first be clear. The Federal Employment Agency anticipates that the number of available workers could shrink by up to seven million by 2035. The Institute for Employment Research (IAB) forecasts a decline in the potential labor force from 45.7 million to 40.4 million by 2060, a decrease of 11.7 percent. The Bertelsmann Foundation estimates the annual net need for international immigration at 288,000 people to keep the labor market stable until 2040. In the second quarter of 2025, despite the economic slowdown, there was still a nationwide shortage of approximately 391,000 skilled workers; more than one in three open positions could not be filled with suitable candidates.

At the same time, Germany has an untapped labor potential of around 6.4 million people who are not employed but are fundamentally capable of working, are registered as unemployed, or only work occasionally. In addition, there are around six million underemployed people, meaning those who would like to work more than they currently do. The hidden labor reserve, meaning people without work who fundamentally want to work but are not actively seeking employment or are not available at short notice, amounted to almost 3.2 million people in 2023.

The potential of unemployed people over 50: 414,000 full-time workers

The figures are in. In January 2026, 723,144 people aged 55 to under 65 were registered as unemployed. In addition, 7.8 million people aged 55 to under 65 are employed and subject to social security contributions; their share of the total workforce has increased from 17 to 23 percent in ten years. The employment rate for those over 65 in Germany is only 8.9 percent, while in Sweden, 20 percent of this age group is still working.

The Institute for Applied Economic Research (IAW) at the University of Tübingen, commissioned by the Foundation for Family Businesses, has presented a detailed calculation of the mobilizable potential. Among older, willing workers aged 50 and over, the IAW calculates a reserve of 414,000 additional full-time workers. This sounds substantial, but compared to the overall gap of five to seven million missing workers, it represents a contribution of only about six to eight percent.

The Green Party's economic association concludes in its own study that up to 2.4 million additional older people could work by 2035, if one also includes the group of those already retired who would be willing to continue working. However, many of them would want to work shorter hours and more flexibly than younger people, so the full-time equivalent would be significantly lower.

The potential of women in mini-jobs and part-time work: Up to 2.9 million full-time equivalents

The greatest untapped potential by far lies with women. The figures are striking: in 2024, for the first time, more women worked part-time than full-time, with the part-time rate at 50.3 percent, compared to just 13.4 percent for men. Around 2.6 million women were exclusively employed in mini-jobs, and a total of almost seven million mini-jobbers were registered with the Mini-Job Center. At 29 percent, the part-time rate in Germany is significantly higher than the EU average of 18 percent, with the gender gap being particularly pronounced at 48 percent for women compared to 12 percent for men.

The IAW study quantifies the mobilizable potential in several stages. If half of the women without dependent children under 14 worked the same number of hours per week as men, the labor market would theoretically gain 1.7 million additional full-time workers. If women with younger children had access to sufficient childcare options, another 717,000 full-time employees would be possible. Furthermore, if women with children who are currently not in the workforce were also mobilized, a further 477,000 full-time workers would be added. In total, this results in a theoretical maximum of almost 2.9 million full-time equivalents from the group of women alone.

Adding further potential from people without vocational qualifications, who could contribute up to 1.175 million full-time workers through training, as well as from people who have already immigrated, where 432,000 additional full-time workers are considered realistic, the IAW study arrives at a total domestic potential of around 5.5 million full-time workers.

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The realistic coverage rate: 40 to 60 percent, not 100 percent

The figures sound impressive on paper. 5.5 million theoretically mobilizable full-time workers against a gap of five to seven million – that would almost be a perfect match. The RWI Leibniz Institute for Economic Research even calculates that realistically activating the unemployed and underemployed could relieve the state budget by €169 billion annually and permanently increase GDP by almost 15 percent.

However, the theoretical maximum figures are far removed from practical reality for several reasons. First, not every older unemployed person possesses the qualifications that are currently in demand. The skills gap is concentrated in specific occupational fields such as nursing, IT, skilled trades, and engineering, while many unemployed people over 50 are qualified in other areas. A regional and skills mismatch persists even with optimal mobilization efforts. Second, the conversion of mini-jobs and part-time work into full-time employment fails due to structural barriers such as a lack of childcare, perverse tax incentives through joint taxation of married couples, and the free co-insurance of dependents in statutory health insurance. Third, experience shows that the political implementation of such reforms takes decades, while the demographic gap is already widening.

Realistically speaking, an ambitious but feasible mobilization of domestic potential should be able to cover roughly 40 to 60 percent of the demographic gap. Specifically, this means that of the projected five to seven million missing workers by 2035, two to four million additional full-time workers could be gained through the full activation of the over-50s unemployed, increasing women's working hours, providing training for low-skilled workers, and improving the labor market integration of immigrants. This is significant, but it leaves a remaining gap of at least two to three million people that cannot be closed without international immigration.

The ethical dilemma of labor migration: The Global South as a reserve army

This brings us to the second, explosive dimension of the issue. Germany is systematically recruiting skilled workers from countries that themselves desperately need these people. This is not an abstract development problem, but a concrete humanitarian scandal, especially in the healthcare sector.

According to WHO estimates, sub-Saharan African countries are facing a shortage of 4.2 million healthcare workers. At the same time, European countries, especially the UK, but increasingly Germany as well, are recruiting doctors and nurses from precisely this region. In 2022, more than 66,000 of the 750,000 healthcare workers in British hospitals were foreign nationals. In France, approximately ten percent of all doctors are foreign-born, while in Ireland and Canada, the figure is around 35 percent. Germany, with its recruitment agreements with the Philippines, Tunisia, and Vietnam, is no exception.

The counterarguments, such as the claim that remittances from migrants strengthen the economies of their countries of origin or that some countries, like the Philippines, deliberately train more people than they need, do not hold up to close scrutiny. Despite the training strategy, rural areas in the Philippines remain understaffed, and the government effectively prioritizes foreign exchange earnings from remittances over the healthcare of its own population. In Côte d'Ivoire, unemployed doctors demanding employment in the public sector were even arrested in 2022, while at the same time wealthy nations are poaching skilled workers from the region.

A scientific briefing by the German Bundestag concludes that recent research approaches no longer interpret the migration of highly skilled workers solely as a one-sided loss of human capital, but rather as a circular process with feedback effects. However, this more nuanced perspective does not change the fundamental problem: Germany cannot permanently rely on compensating for its own demographic shortcomings by extracting skilled workers from countries where people are dying from treatable diseases due to a lack of medical personnel.

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Why the either-or debate is misleading

The honest answer to the initial question is: No, mobilizing unemployed people over 50 and women in mini-jobs alone cannot fully compensate for the skills shortage or make labor migration unnecessary. But current policy is precisely miscalibrated: Germany is investing massively in recruiting from abroad while simultaneously neglecting the activation of its domestic workforce. The correct order would be the other way around.

If Germany were to eliminate the tax disincentives for women in mini-jobs and part-time work, in particular by restricting joint taxation for married couples and reforming the free co-insurance system, a substantial portion of the 2.6 million women exclusively in mini-jobs could be transitioned into jobs subject to social security contributions. If age discrimination in hiring were consistently combated and the activation rate of unemployed people over 50 were raised to the level of younger workers, hundreds of thousands of experienced professionals could be brought back into the labor market. If early retirement without deductions were limited to particularly demanding professions, as in Austria, instead of being offered as a general option, hundreds of thousands more would remain in the workforce longer.

The study by the Green Party's economic association and the IAW study both conclude that domestic mobilization is not a replacement for, but a necessary complement to, controlled immigration. The crucial point is this: every worker mobilized domestically reduces the need for international recruitment and thus also the ethically problematic brain drain in countries of origin that themselves suffer from an acute shortage of skilled workers.

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The percentage calculation that politicians don't like

In summary, the following picture emerges of the realistically mobilizable potential in relation to the demographic gap of five to seven million missing workers by 2035:

Mobilizing older workers over 50 could close approximately six to eight percent of the overall gap, equivalent to roughly 400,000 to 500,000 additional full-time workers. Increasing the working hours of women in part-time and mini-jobs offers the greatest single potential, covering 25 to 35 percent of the gap, or 1.7 to 2.9 million full-time equivalents. Upskilling individuals without vocational qualifications could cover another eight to twelve percent, roughly 600,000 to 1.175 million full-time workers. Improved labor market integration of immigrants already living in Germany would yield an additional four to six percent, approximately 400,000 full-time workers. In total, this results in a theoretical coverage potential of 43 to 61 percent, assuming maximum mobilization of all domestic resources.

The remaining 39 to 57 percent, or two to four million workers, would still need to be filled through international immigration. However, the crucial factor here is how this immigration is managed. Ethically responsible labor migration means not recruiting skilled workers from countries that are themselves suffering from critical staff shortages, particularly in healthcare. It means concluding fair partnership agreements that also strengthen the countries of origin and developing circular migration models in which knowledge transfer takes place in both directions.

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Theoretically and purely in terms of numbers, it would certainly be possible that by consistently and fully mobilizing unemployed people over 50, women in mini-jobs/part-time work and other domestic reserves, a very large part – perhaps even the majority – of the skilled worker shortage could be covered, at least on paper.

1. What does "theoretically possible" mean?

"Theoretical" here refers to a kind of maximum estimate under ideal conditions:

• no age discrimination,
• Sufficient suitable qualifications or rapid retraining,
• Complete removal of structural barriers (e.g., lack of childcare, mini-job traps, tax and insurance incentives, regional mismatch).

Under such assumptions, several recent studies estimate that approximately 5 to 6 million additional full-time workers from within the country are needed:

• Approximately 1.7 million additional full-time workers through an increase in women's working hours,
• approximately 414,000 from the group of older people willing to work aged 50 and over,
• In addition, several hundred thousand each, totaling around 1–1.2 million, through the qualification of low-skilled workers and better integration of immigrants.

Compared to a projected demand for skilled workers of 5–7 million by 2030/2035, this volume is of a similar magnitude, so one can say:

Purely arithmetically, almost complete coverage by domestic potential would be conceivable.

2. But why is this not "realistic" in practice?

The crucial limitation lies in the difference between theory and reality:

Skills and industry mismatch

Many unemployed people over 50 lack the specific skills in demand (e.g., IT, highly skilled trades, nursing, engineering).
Labor migration primarily serves to quickly close this specific gap, not simply to increase the overall workforce.

Structural barriers remain

Even with numerous reform proposals (e.g., mini-job reform, adjustments to joint taxation for married couples, expansion of childcare), it can be assumed that only a portion of the theoretical potential will be realized.
Studies such as the IAW report therefore speak of "usable" or "realistically mobilizable" potential of approximately 2–3 million full-time workers, not 5–6 million.

Time dimension

The demographic gap won't close in 2035; its effects are already being felt today. Education and retraining take years, while labor migration is a much faster lever (admittedly not without costs, but more effective in terms of timing).

3. What percentage could theoretically be covered?

Under very optimistic assumptions – that is, if one utilizes all the potential mentioned and approaches the theoretical 5–6 million – and the skills gap is around 5–7 million, the following results:

• In theory, around 70–100 percent of the skilled worker shortage in Germany could be covered by mobilizing domestic potential.
• Realistically (with political, social and temporal limitations), the coverage rate is more likely to be in the range of 40–60 percent, as already argued in the previous analysis.

The new formula against the skills shortage: How AI enhances the potential of every individual

When combined with AI, the whole calculation becomes significantly more complex – and the answer to the question changes from "theoretically possible" to "theoretically more likely, but with other side effects".

AI is not only changing the quantity of workers needed, but also the quality of those needed and what skills are required. This fundamentally alters the relationship between domestic potential, labor migration, and skills shortages.

1. AI as a “mental amplifier” instead of a complete replacement for human labor

Current labor market research has reached a clear interim conclusion:

• AI will not simply "automate away millions of jobs," but will radically change work processes.
• According to studies by the IAB, the GWS and the Kiel Institute, the total number of employees remains roughly stable, but there are major shifts:
• Approximately 800,000 to 1.6 million jobs may be lost, while at the same time just as many or more new jobs will be created.
• Jobs are shifting from routine and office work to management, AI coordination, control, creativity, consulting, care, craftsmanship and technical skills that are difficult to automate.

In this sense:

AI increases the potential of skilled workers per person because people with AI support can achieve significantly more.

2. AI can massively alleviate the shortage of skilled workers – but not eliminate it

Several model calculations show that the productivity boost through AI significantly alleviates the shortage of skilled workers in Germany:

• The Cologne Institute for Economic Research (IW Köln) estimates that generative AI could "save" (i.e., replace or reduce) around 3.9 billion working hours in Germany by 2030.
• The otherwise predicted demographic working hours gap is approximately 4.2 billion hours.

That means:

AI could theoretically close almost the entire demographic gap in working hours if it were deployed across the board.

Other studies (e.g., Prognos, GWS, IAB, Bundestag reports) come to a similar conclusion:

• AI could reduce the need for labor by approximately 1.5 million jobs by 2035.

In addition, economic output increases:

• AI could increase annual growth in Germany by around 0.8 percentage points;
• Over 15 years, that would amount to around 4.5 trillion euros in additional added value.

That means:

In purely arithmetic terms, the effects of AI are on the same order of magnitude as the shortage of skilled workers.

They can therefore significantly reduce the pressure of the shortage – and in extreme cases, considerably decrease the need for additional labor (whether domestic or migrant).

3. Combination: Domestic potential + AI = far less migration needed

Let's roughly add up the results:

Domestic potential (theoretical)

• 5-6 million additional or "released" full-time workers from among women, older people, low-skilled workers, and migrant integration.

AI impact (theoretical):

• AI savings of 1.5 million jobs by 2035,
• plus productivity effects that significantly enhance the impact of domestic workers.

That means:

If you approach both ambitiously –

1.  systematic mobilization of domestic potential and
2. Consistent, widespread use of AI in everyday work –

Then the skilled worker shortage could effectively be reduced to a very minor residual problem.
This would bring the current forecasts of 5–7 million missing workers down to a level that could be covered partly by domestic demand and partly by significantly reduced labor migration.

Systematically formulated – Domestic mobilization only:

• Theoretically, up to 70–100% of the deficiency.

With AI: The required “quantity” of workers decreases, so that 40–60% domestic mobilization with AI support may be sufficient to largely close the shortage.

4. Important limitations: AI changes, rather than resolves

Despite this high theoretical potential, one thing is crucial:

• AI is changing the composition of the skilled workforce instead of replacing it.
• Instead of many people with simple routine tasks, we need fewer, but higher-quality workers who can control, monitor, and complement AI.
• IT specialists, AI specialists, nursing staff, technical and craft specialists, educational and health professionals will not become obsolete, but will become more central than ever before.

AI can't do everything:

• Physical manual labor, emotional labor, care, maintenance, spontaneous problem solving – much of it remains “human”.
• Furthermore, studies show that AI tools often increase work intensity rather than reducing working hours (employees work more and faster because the technology allows more).

• There will be a particular shortage of AI specialists.
• In order to use AI effectively, Germany needs more IT professionals, AI specialists and data experts – that is, another part of the skills gap.

5. Conclusion

Yes, AI increases the theoretical possibility that the shortage of skilled workers can be met without large-scale labor migration from abroad.

And yes: in combination

• with full mobilization of unemployed people over 50,
• Women in mini-jobs/part-time work,
• further domestic potential and
• widespread, effective use of AI

Labor migration to Germany could be significantly lower than currently predicted – perhaps even slipping into the realm of smaller supplementary flows.

But labor migration will probably not become completely unnecessary because:

• AI complements some tasks, but requires others
• There will continue to be specific shortages in certain professions,
• and the political, social and organizational implementation of the AI ​​revolution is proceeding just as slowly and incompletely as the mobilization of domestic potential.

In theory and purely numerical terms, it is possible to completely or almost completely address the skilled worker shortage by activating unemployed people over 50, women in mini-jobs/part-time work, and other domestic potential.
In practice, however, this is very difficult because some workers lack the necessary qualifications, certain structural barriers can only be partially overcome, and labor migration currently remains the fastest way to supplement the untapped domestic potential.

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The conclusion that shouldn't be one

Germany has a choice: It can continue to squander its own potential and instead poach skilled workers from the Global South, whose absence costs lives there. Or it can finally tackle the structural reforms that have been called for for decades: abolishing the mini-job subsidy, reforming the joint taxation of married couples, massively expanding childcare, consistently combating age discrimination, and implementing flexible retirement transition models. This would not eliminate dependence on ethically questionable labor migration, but it would reduce it to a responsible level. Around half of the demographic gap could be closed domestically if political priorities finally followed economic logic instead of lobbying interests and convenience.

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