Baby Boomers Set to Leave Gap in the American Workforce That Young Adults Are Unlikely To Fill

As the baby boomer generation—those born between 1946 and 1964—leaves the workplace en masse, and young adults don’t plan on having enough kids to replace them, the American labor force could be in danger.

The U.S. population aged 65 or older increased by 3.1% from 2023 to 2024. Yet, the population aged 18 or younger decreased by 0.2% during the same time, according to a recent report by the U.S. Census Bureau. Additionally, the number of states where older adults outnumbered Americans under age 18 increased to 11 in 2024 from three in 2020.

An aging population can cut into labor-force participation rates, as Americans typically exit the labor force at 62. At the end of 2029, all baby boomers will be 65 or older. As the second-largest living generation after millennials, their exit from the labor market could leave a significant gap between the number of jobs and workers available.

Many economists are concerned about future labor shortages because gaps can hinder U.S. economic growth and business competitiveness, which are essential to keeping prices down and wages up.

Current and Future Labor Force Is Shrinking

The momentum of the U.S. labor force has slowed in recent decades. Currently, the country needs to add 4.6 million workers annually—about four times the average rate over the last decade—to keep pace with current supply and demand levels, The Conference Board estimates.

Labor-force participation drastically dropped across all age groups during the pandemic. However, most groups have returned to or surpassed pre-pandemic levels, except for workers over 55.

The participation rate of older workers in March 2025 was about five percentage points, or 2 million workers, lower than its pre-pandemic level, according to The Conference Board.

And labor shortages could worsen in the future, as population numbers are likely to decrease. The total number of children the average man and woman aged 29 to 39 planned to have in 2023 dropped to 1.8 from 2.3 in 2012. That is lower than 2.1, the average number of children a person should have for the population to replace itself, according to a government data analysis by the Pew Research Center released in June.

An increasing number of younger American adults say they don’t want children because they can’t afford them. The costs of raising kids, such as paid child care, are rising, with that expense increasing year over year by 3.5% in May 2025, according to the most recent Consumer Price Index (CPI) data.

That jump in child-care costs is also stunting present labor-force participation. Many parents, particularly women, cite family responsibilities or the fact that they can’t arrange child care as one of the primary reasons they are not looking to join the labor force, according to a Federal Reserve Bank of St. Louis survey published Tuesday.