Taiwan Faces Two Retirement Waves as 6.67 Million People Reach Working Age Exit

Large generations are retiring as smaller ones enter work

Taiwan faces two waves of retirement involving generations that together added 6.67 million people to its population, while much smaller generations are entering the workforce. Government projections describe a sharp reduction in the working age population as the first wave, already underway, is followed by another expected in about sixteen years.

The Ministry of the Interior identifies two baby booms behind the change. Births from 1958 to 1966 increased the population by 3.78 million, while another surge between 1976 and 1982 added 2.89 million. People born in the late 1950s and early 1960s began retiring in 2023, bringing a large generation to the end of its working life.

Recent generations entering work amount to no more than 1.6 million people, according to the ministry. Compared with the 3.78 million in the first retirement wave, that leaves a gap of more than 2 million. Employers therefore face a basic arithmetic problem: many more people are reaching retirement than are arriving to replace them.

Taiwan's population is shrinking at the same time. At the end of July, it stood at 23,337,936, a decrease of 71,387 from a year earlier and the nineteenth consecutive month of decline. Fewer residents, more retirees and smaller incoming generations are combining to tighten the supply of labor.

Employment patterns add to the pressure. Only about 10 percent of people aged 65 or older remain employed in Taiwan, compared with roughly 25 to 35 percent in South Korea, Japan and Singapore. Among people aged 15 to 29, labor force participation is about 38 percent, against rates near 60 percent in Europe and the United States.

The challenge is already affecting recruitment and workforce numbers. Taiwan's response will depend on how many people can remain in or return to employment, how much each worker can produce, and how migration can supplement the domestic labor supply.

When the two retirement waves arrive

Taiwan's demographic squeeze developed over decades. Large generations born after the war entered employment together. Fertility then fell while people lived longer, leaving smaller generations to follow them and increasing the share of residents spending more years in retirement.

The first retirement wave began in 2023. The second is expected in the early 2040s, when people born in the late 1970s and early 1980s reach typical retirement ages. Together, the two waves unfold over roughly two decades and account for the government's estimate of a reduction of about 6.67 million in the working age population.

• 1958 to 1966: The first baby boom added 3.78 million people.
• 1976 to 1982: The second baby boom added 2.89 million people.
• 2023: People born in the late 1950s and early 1960s began retiring.
• 2025: Taiwan is expected to become a super aged society, with people aged 65 or older making up more than one fifth of the population.
• 2028: The working age share is projected to fall below two thirds.
• Early 2040s: The later baby boom generation reaches typical retirement ages.
• 2070: The population could fall to about 15 million, with nearly 46.5 percent aged 65 or older.

The National Development Council's longer range projections also put Taiwan's median age above 62 by 2070, compared with about 45 today. Median age is the midpoint of the population: half the people are younger and half are older.

A falling working age share means a smaller pool of potential workers supporting more retirees and other dependents. Without substantial gains in participation, productivity or migration, the number of people available for work will keep putting pressure on employers.

Why participation matters alongside population

Taiwan's low participation among younger and older residents makes the demographic gap harder to manage. Population figures describe how many people are in an age group; labor force participation describes how many are working or seeking work.

People aged 15 to 29 have a participation rate of about 38 percent. Extended education keeps more young people out of full time employment until later in their twenties, helping explain why this measure is below the roughly 60 percent reported for Europe and the United States.

Older residents present another opportunity to widen the labor pool. About 10 percent of Taiwan's population aged 65 or older remains employed, while the comparable figures cited for South Korea, Japan and Singapore range from 25 to 35 percent. Many older adults are leaving employment even while they remain in good health.

Taiwan can increase the number of workers by helping more people participate, as well as by bringing new people into the country. For an older person, that may mean a job with shorter hours or less physical strain. For a younger person, it may mean a clearer route from education into stable employment.

The two age groups need different support. Longer study affects when young adults begin working, while pension arrangements, workplace practices and family responsibilities influence when older adults stop. Raising participation requires attention to those practical conditions.

What shapes work after retirement

Research on retirees in Taiwan finds that a person's previous occupation affects whether they continue working. Former employees of private companies and people who were self employed are more likely to keep earning after retirement than former civil servants.

Flexibility and independence in a person's earlier job also shape decisions about returning to paid or unpaid work. Someone accustomed to choosing their hours or managing their own tasks may have more ways to remain active after leaving a regular position.

Taiwan's lower employment among older adults may reflect several factors, including pension rules that favor early withdrawal from work, workplaces that have not fully adjusted to older employees, and a limited supply of flexible roles. A person may be capable of working while finding the available schedule or duties unsuitable.

Men and women also follow different patterns. The research finds that men are more likely to undertake paid work or self employment after retirement, while women often move into unpaid work connected with family care. Care responsibilities fall heavily on women, and workplace arrangements can make returning to paid employment harder.

Flexible hours, gradual retirement, job sharing and cooperation between generations can help older adults balance employment with caregiving. Gradual retirement allows someone to reduce their hours rather than leave work all at once. Job sharing divides one role between workers, preserving coverage while giving each person a shorter schedule.

Training also matters. Courses that refresh existing skills, particularly the use of digital tools, can help older workers remain active and extend their working lives. Employers need to combine training with jobs that make use of those skills and accommodate the worker's circumstances.

Fewer workers put productivity under pressure

Taiwan's economic challenge is about both the number of workers and what they can produce. Evidence from Taiwan suggests that an older workforce can support output through experience and accumulated knowledge, while a higher old age dependency ratio weighs on growth.

The old age dependency ratio compares the number of older people with the working age population. As it rises, a smaller potential workforce supports more retirees. Pension and health spending also face pressure as the population ages.

Productivity is a central part of this relationship. Total factor productivity, or TFP, describes how effectively an economy combines labor, equipment and other resources to produce goods and services. Better skills, technology and organization can help workers achieve more with the resources available.

Labor shortages can push wages upward and encourage companies to invest in automation, software and artificial intelligence. Those investments can increase output per worker. Small and medium sized businesses operating on thin margins, however, may find the cost of new equipment and systems difficult to manage.

Research on labor markets indicates that older and younger workers tend to complement one another. Teams can combine the experience of older employees with the new skills of younger colleagues. Extending healthy working lives, reducing age discrimination and supporting working caregivers can each add capacity.

The International Monetary Fund, in an analysis of global aging, outlined policies that can limit the economic slowdown associated with an older population. The institution stated:

Policies that support healthy aging, raise labor force participation among older individuals, close gender gaps, and adapt retirement ages to increased life expectancy can help mitigate the negative effects of aging.

For Taiwan, those measures include increasing the age at which people actually leave employment, offering targeted training, and making flexible work more accessible to people aged 50 and older. Better health in middle age can also extend the years in which people are able to work.

Retirement and care policies are being reconsidered

Taiwan has begun redesigning labor and social policies for an older population. Government plans focus on promoting employment among older workers, encouraging learning throughout life and adapting workplaces to the needs of aging employees.

Authorities have explored flexible retirement arrangements that would allow people to receive partial pensions while working part time. Incentives for companies to retain or recruit older workers are another option. Pension and social security reforms aim to keep those systems financially sustainable as the balance between workers and retirees changes.

Women and caregivers are central to the response. Affordable childcare, dependable long term care and more generous parental leave can help parents, especially mothers, remain connected to employment. Removing barriers for women returning after a career break can also help fill vacancies and reduce shortages of particular skills.

Care services affect the labor supply in two ways. They require their own workforce, while helping family members keep paid jobs instead of leaving employment to provide care. Expanding services therefore involves both recruiting care workers and supporting people whose relatives need assistance.

Taiwan has relaxed some restrictions on foreign labor and expanded long term care services. These measures partly ease staffing pressure in hospitals, care delivered at home and manufacturing. Flexible retirement arrangements and other measures under exploration remain part of the policy discussion.

Employers and public agencies will need to connect these efforts. Training is more useful when suitable jobs exist, and flexible work is easier to sustain when childcare and care for older relatives are reliable.

Helping graduates move into formal employment

The Ministry of Labor has identified about 196,000 university and college graduates who have not enrolled in labor insurance. Their absence from that system signals a stalled transition into formal employment and has made the move from school to work another part of the labor policy challenge.

Work based learning, apprenticeships and clearer routes into a first stable job can shorten the period between graduation and employment. Employers can offer placements linked to formal benefits, including labor insurance enrollment, so that entry into work also brings the protections associated with regular employment.

Taiwan's participation rate of about 38 percent among people aged 15 to 29 leaves room for improvement toward the rates near 60 percent cited for Europe and the United States. Extended education explains part of the gap, making the transition after study especially relevant.

Universities, vocational schools, employers and workforce agencies can coordinate training with actual vacancies. Such partnerships can help graduates learn skills that employers need and give companies a more dependable route to recruit new staff.

Younger workers and older employees can also benefit from working together. Apprenticeship style placements give newcomers practical experience, while mentoring roles allow retiring employees to pass on knowledge before reducing their hours or leaving.

Migration and technology can help, while care needs grow

Japan, South Korea and Singapore offer examples of economies using foreign workers or talent to supplement domestic labor. Japan, which has the world's highest share of people aged 65 or older, has expanded its foreign workforce to around two million and plans further increases.

Taiwan has options along a similar route. More permanent visas for skilled workers and workers with intermediate skills could support longer stays. Access to schools and housing could also help workers settle with their families rather than treat employment in Taiwan as a temporary arrangement.

Automation and artificial intelligence provide another way to manage limited staffing. Advanced machinery, software and redesigned processes can reduce repetitive tasks and increase output per employee. Companies still need workers who can operate the equipment and use the systems effectively.

Health and social care will require more people even as technology improves. Taiwan has expanded long term care programs through community services and support delivered at home. A growing older population increases the need for workers who can provide those services.

More training places, better pay and greater recognition for care work can attract domestic and foreign recruits. Coordination between hospitals, insurers and community providers can also improve care and reduce costs.

Migration, technology and care services address different parts of the same problem. Foreign workers increase staffing, technology helps employees produce more, and care services support both older residents and relatives who need to remain employed.

How companies can widen their recruitment pool

Employers can respond now by changing jobs and recruitment practices that keep capable people out of employment or leave them underused. Adjusting schedules, duties and workplace expectations can make more roles accessible without requiring large spending.

Research and workplace experience point to several practical measures:

• Provide flexible hours, different shift options and part time roles suited to older workers and caregivers.
• Create gradual retirement programs that combine reduced hours with mentoring and the transfer of knowledge.
• Use job sharing where a role needs continuous coverage without requiring one person to work full time.
• Offer courses that refresh skills, particularly digital literacy and basic data tools.
• Improve ergonomics, safety and equipment suited to older workers to reduce physical strain and injury risk.
• Develop apprenticeship style placements for graduates and connect them to formal benefits, including labor insurance enrollment.
• Use remote and hybrid work where possible, and assess performance through output rather than time spent at a desk.
• Work with vocational schools, universities and workforce agencies to match training with vacancies.

Career routes for both younger and older recruits can help companies broaden the group of people they consider for jobs. Faster recruitment, lower staff turnover and better retention of knowledge are the potential benefits during a period of tight labor supply.

Taiwan's two retirement waves make these adjustments increasingly urgent. Larger generations are leaving, smaller ones are arriving, and employers need ways to retain experience while bringing new workers into stable jobs. Participation, productivity and migration will each affect how much of the demographic gap the economy can absorb.

Key Points

• Government projections put the reduction in Taiwan's working age population associated with two retirement waves at about 6.67 million.
• The first baby boom added 3.78 million people between 1958 and 1966; the second added 2.89 million between 1976 and 1982.
• The first retirement wave began in 2023. The second is expected in the early 2040s, about sixteen years after 2025.
• Recent generations entering work total no more than 1.6 million, leaving a gap of more than 2 million against the first wave.
• About 10 percent of people aged 65 or older remain employed, compared with roughly 25 to 35 percent in South Korea, Japan and Singapore.
• Participation among people aged 15 to 29 is about 38 percent, against rates near 60 percent in Europe and the United States.
• Taiwan's population stood at 23,337,936 at the end of July, down by 71,387 from a year earlier after nineteen consecutive months of decline.
• Projections place super aged status in 2025 and the working age share below two thirds in 2028.
• By 2070, the population could fall to about 15 million, with nearly 46.5 percent aged 65 or older and a median age above 62.
• Policy options include flexible retirement, training, support for caregivers, migration, automation and expanded long term care.