making it easier for retirees to earn additional income and thus encouraging them to keep working. yet another area offering potential is the participation of women in the labour force, where improved conditions for balancing work and family commitments have already sent participation levels sharply higher. the difference between the ratios of women and men in employment has more than halved within the space of two decades, and the higher the level of education, the narrower the gap between women and men. however, there continues to be a much higher proportion of women who work part - time compared to men. almost half of all women work part - time, compared with just one in ten men. because age cohorts with a stronger tendency to work part - time will be larger, the average weekly working hours per employed person are likely to decline slightly by 2025. the potential number of hours worked, then, is likely to be somewhat lower, and this will likewise drag on potential growth in the german economy. the projected potential growth rate of just over ¾ % will originate primarily from productivity growth, where it is assumed that labour productivity will move at a less dynamic pace as demographic change makes itself felt. this means that productivity growth will mainly be propelled by technological progress. 5 / 7 bis central bankers'speeches one factor to be considered when it comes to labour productivity is that physical and cognitive capacities deteriorate after a certain age, though this can be offset by experience. as the saying goes : young people run faster, but seniors know the shortcuts. another factor is that as society ages, parts of the value added chain will shift from goods production to the services sector, moving chiefly into the long - term care sector. this also tends to dampen productivity growth, however, because experience has shown that service providers are less productive than the production sector. of course, potential output depends not just on the number of hours worked and labour productivity, but also on capital investment, and at the end of the day, demographic trends also impact on fixed capital formation. so the investment restraint observed in recent years might have something to do with the impending demographic change. put more simply : why should a company invest in new machinery if, looking ahead, it won ’ t have the employees it needs to operate this machinery? and wouldn ’ t it make more sense to invest in regions with more vibrant economies where the relevant end customers can also be found? it ’ s also worth considering the german economy ’ s high current account surplus in a demographic context.

, and this is mainly down to the demographically - induced decline in the number of hours worked. per capita growth looks somewhat better because of the shrinking population, but here again, germany ranks no better than mid - table compared with its european peers, according to the oecd. our economists ’ estimate of potential output i mentioned just now is based, then, on the best possible forecast of how the labour supply will develop in the years ahead. 4 / 7 bis central bankers'speeches notable shifts in the composition of the labour supply will be evident within the space of just a few years. the working - age population is a relevant factor for determining potential output. this labour force potential is defined relatively broadly, with ages ranging between 15 and 74. depending on which net immigration flows one assumes, this potential will pass its peak between 2020 and 2023. given cumulative net immigration of 2. 5 million people, the labour force potential in 2025 will be roughly as high as today ’ s. the age structure will have changed considerably, however. the number of people aged between 60 and 74 will have risen by more than three million, but the number of employed people will have increased by just one million, assuming that labour force participation in this age cohort remains unchanged. by contrast, the 45 to 54 age cohort will have fallen by 3½ million. because labour force participation is very high in this age group, the decrease will push down the labour force to almost the same degree. this can be blamed on the decline in the birth rate in the 1960s that i mentioned earlier, so it has long been expected. another population decline has been forecast, this time in the under - 35 age cohort, though much of this particular effect will be offset by immigration. migrants tend, on average, to be far younger than the existing population. one out of two migrants since 2010 has been aged between 20 and 30 years old. the strong influx of refugees to germany in 2015 even caused the average age of the population in germany to fall for the first time since reunification : from 44 years and four months to 44 years and three months. labour force participation will presumably continue to rise in certain age groups. increasing the statutory retirement age should therefore see to it that the actual age when people retire goes up as well. the proportion of physically demanding jobs is also on the wane, so older people will be able to stay in work for longer. the “ flexi retirement ” scheme launched this year is also