Issue link: https://maltatoday.uberflip.com/i/1541557
11 NEWS maltatoday | SUNDAY • 23 NOVEMBER 2025 Maltese employment hits record despite surge in foreign workers THE increase in Maltese work- ers over the past decade was the strongest ever recorded— equal in absolute terms to the previous three decades combined. Nonetheless, foreign work- ers still accounted for around three-quarters of employment growth since 2013. This emerges from a Central Bank of Malta report titled The Interplay Of Reforms And For- eign Labour Inflows In Driving Labour Supply Growth In Mal- ta, prepared by Aaron G. Grech, chief officer of the Economics Division. Without the unprecedented rise in domestic participation, driven mainly by Maltese women and older Maltese workers join- ing the workforce, the number of Maltese in employment would have been slightly below 160,000 by 2023—far below the actual 201,008. Even with this record domestic mobilisation, foreign labour remained essential to fill the majority of new jobs. Maltese women drive labour growth The report highlights the in- crease in Maltese women's em- ployment as one of the most transformative domestic labour market shifts of the decade. Between 2013 and 2023, the number of Maltese women below pension age in employment rose by 25%, representing an absolute increase roughly twice that re- corded among older workers. This pushed the proportion of working-age Maltese women from 37% in 2013 to 40% in 2023, while the number of Maltese men below pension age grew by only 2% or around 2,000 workers. This growth was concentrated in two groups: Younger and older Mal- tese women, each responding to specific policy reforms. The introduction of free child- care in April 2014 had a major impact on labour force partici- pation among younger Maltese women. Attendance at childcare centres rose from 1,800 to 8,960 children over 10 years. The poli- cy effectively ended the three-to- four-year career break that many Maltese women historically took after childbirth. For cohorts born after 1986, the first fully covered by the scheme, employment barely dipped fol- lowing the first child, while for some other cohorts the decline was minor and temporary. The Central Bank estimates this re- form contributed 6,200 addition- al Maltese women to the employ- ment market. Older Maltese women bene- fited from pension reforms and top-up schemes, which provided incentives for retiring after 61. In 2012, women aged 55 to 59 had an employment rate of just 28%, about half of today's level. Raising the statutory pension age reduced exits at retirement, with the drop at age 61 falling to only 10% for women compared with 37% for men. The 2017 top-up scheme further reduced exits, and for Maltese women born in 1960, the probability of leaving employment at 63 nearly halved compared with earlier cohorts. Older Maltese workers an untapped domestic potential Older Maltese workers, men and women, represent the coun- try's largest untapped domes- tic labour potential. If Malta achieved employment rates sim- ilar to Sweden for the same age group, the labour supply could expand by roughly 23,500 ad- ditional workers. A significant challenge for this group is skills mismatch, as nearly 60% of Mal- tese aged 50 to 74 have only low- er-secondary education or less, limiting access to high-skill jobs. Where Maltese workers went The report highlights a struc- tural shift in the labour market. Newly employed Maltese work- ers, including Maltese women, moved out of traditional sectors into higher-paying, knowledge-in- tensive fields. Between 2013 and 2023, Maltese employment in- creased by 15,087 in professional services and administrative sup- port, 12,082 in public administra- tion, education, and health, 4,168 in arts, entertainment, and other services, 3,229 in financial servic- es, and 1,822 in information and communication. Public admin- istration, education, and health were the only sectors where the increase in Maltese workers ex- ceeded that of foreign workers. Maltese workers in financial and professional services are also noted as being relatively younger than the overall Maltese work- force, while the youngest Maltese workforce is employed in the in- formation and communication sector. In contrast, traditional sectors such as manufacturing, construc- tion, retail, transport, and ac- commodation and food services relied heavily on foreign labour. In manufacturing, 3,448 fewer Maltese workers were employed while 7,322 foreign workers joined. In construction, 2,479 fewer Maltese workers were employed while 10,640 foreign workers joined. In retail, trans- port, accommodation, and food services, 2,751 fewer Maltese workers were employed while over 30,000 foreign workers were added. These figures show that Maltese workers, including Maltese women, preferred high- er-skilled roles, while foreign la- bour filled lower-wage and physi- cally demanding jobs. The skills challenge The report warns that Malta is approaching the limits of domes- tic labour-supply growth among younger Maltese workers. Fu- ture expansion will depend on upskilling older Maltese work- ers and improving educational attainment to meet demand in high-value sectors. Currently, Maltese adults spend less than half the time in training com- pared with peers in Germany or Sweden. Without greater invest- ment in skills, Malta risks contin- ued reliance on foreign labour to fill critical roles. Foreign labour drove three-quarters of job growth since 2013, but unprecedented increases in participation rates for Maltese women and older workers kept domestic employment at historic highs, Central Bank report shows The increase in Maltese women's employment is one of the most transformative domestic labour market shifts of the decade JAMES DEBONO jdebono@mediatoday.com.mt