ILO Employment and Social Trends 2026: Demographics, Technology, and Informality
SDG 8: Decent Work and Economic Growth | SDG 10: Reduced Inequalities
Ministry of Labour and Employment | NITI Aayog
The International Labour Organization (ILO) has released its Employment and Social Trends 2026 report, highlighting that while global unemployment remains low at 4.9%, progress in enhancing the quality of work has largely stalled. Globally, 2.1 billion workers—nearly 58% of the workforce—remain in informal employment, which is characterized by a lack of social protection and workplace safety. Furthermore, 284 million workers continue to live in extreme poverty, earning less than $3 a day.
Structural Shifts and Technological Disruptions
Slowing Transformation: The movement of workers into more productive sectors has halved over the last two decades, acting as a major roadblock to reducing decent work deficits.
Artificial Intelligence (AI) Impact: While AI holds potential for productivity gains, it threatens to disrupt labor markets, particularly for young people with advanced education in high-income countries who face higher automation risks.
Informality Dynamics: The global informality rate increased by 0.3 percentage points between 2015 and 2025, primarily driven by growing employment in regions with high existing informality, such as Southern Asia.
Trade and Demographic Challenges
Trade-Linked Jobs: Approximately 465 million jobs globally are linked to foreign demand; these positions generally offer better pay and more opportunities for women and youth.
Demographic Divergence: High-income countries face shrinking labor forces due to ageing, while low-income countries struggle to generate enough quality jobs for a large, incoming youth cohort.
Persistent Gender Gaps: Women remain significantly underrepresented in the labor force, being 24.2 percentage points less likely than men to participate, with young women facing much higher NEET rates.
What is the ‘Jobs Gap’ and how does it differ from traditional unemployment? The jobs gap is a broader measure of labor underutilization that includes not only the unemployed but also individuals who want to work but are not actively searching or are currently unavailable. While global unemployment is projected at 186 million, the jobs gap is more than double that at 408 million. This metric is crucial because it captures “discouraged workers” and those with care responsibilities—predominantly women—who are effectively excluded from the labor market despite their willingness to work.
Policy Relevance
The report underscores that economic growth alone is insufficient to address decent work deficits, requiring targeted domestic policies to drive formalization and social justice.
Strategic Impact for India:
Capitalizing on the Demographic Dividend: India must generate high-quality employment to accommodate its massive youth population and prevent them from falling into low-productivity informal work.
Formalizing through Digitalization: Leveraging digital infrastructure and AI-based financial services can facilitate the formalization of India’s large informal sector by improving access to credit and social security.
Bridging the Gender Participation Gap: Addressing social norms and care responsibilities is essential to improve the low labor force participation rate of Indian women compared to global averages.
Leading in Green Jobs: India is recognized as a leader in renewable energy job creation, providing a strategic pathway to transition workers into future-proof, high-quality “green” sectors.
Follow the full report here: ILO Employment and Social Trends 2026