7th November 2025 |
Reports, Research and Analysis
With the Irish labour market effectively at full employment conditions, this paper highlights areas where there are opportunities for labour market activation to increase the supply of workers.
The paper examines the composition and characteristics of the inactive population in Ireland over time, including by gender and age, using Labour Force Survey data from the Central Statistics Office (CSO). The paper offers a deep dive into the prime working age cohort (25–54 years old), as this is where the most immediate opportunity to expand labour market participation lies. As of Q2 2025, 1.5 million individuals aged 15 and over are classified as inactive, meaning they are not in employment and not actively seeking work. While nearly half of this group are aged 65 and older— typically not expected to re-enter the labour force—the prime working age group (25–54 years) accounts for 18% of the inactive population (266,800 persons). Most of this group are also female (191,400), highlighting a gendered dimension to inactivity. Barriers to work include caring responsibilities and illness or disability.
The paper also assesses the Potential Additional Labour Force (PALF). Persons in the PALF are outside of the labour force but deemed to have a closer attachment to the labour market than other inactive persons. As of Q2 2025, the PALF accounts for 118,000 persons, with just over one third (31,200 persons) of prime working age.
Finally, the paper also examines Ireland’s inactive population relative to the EU, finding that Ireland performs well, with the inactive population (as a percentage of the working age population) well below the EU average. At the same time, those with lower levels of education are more likely to be inactive highlighting the need for education, training and life-long learning.
The paper highlights that policy measures aimed at supporting labour market entry or re-entry—such as improved access to affordable childcare and housing, flexible working arrangements, training and re-skilling as well as targeted activation supports—will help to tap further into the inactive labour market, particularly for females, persons with illness or disability, and persons in rural areas. Policies seeking to extend longer working lives should also be part of the response, particularly in the context of Ireland’s rapidly aging population. In parallel, increasing labour productivity and continuing to facilitate inward migration will be essential elements to supporting further labour market growth.
Topics:
The Business Environment, Workplace and Skills