Germany's Population Decline Masks Regional Winners and Losers

Germany's population will shrink by roughly 1.7 million people over the next two decades, falling from 83.5 million in 2025 to around 81.8 million by 2045. But the raw number masks a more pressing reality: the country is not simply getting smaller. It is getting older, and the people who remain will be asked to do more work with fewer hands.

The working-age population—those between roughly 15 and 65—will contract by 4.7 percent by 2045, according to research from the Berlin Institute for Population and Development, conducted with the Wüstenrot Foundation. This is the consequence of a demographic wave that has been building for decades. The baby boom generation, born in the 1960s when annual births exceeded one million, is now retiring. The cohorts that follow are substantially smaller. Birth rates have halved since then, and immigration, while it has helped stabilize some regions, has not been enough to reverse the aging of the overall population.

Catherina Hinz, president of the Berlin Institute, presented the findings in Berlin and offered a stark assessment: the consequences of demographic change can no longer be avoided, only mitigated. The longer Germany waits to act, she said, the narrower its options become. Yet the study also reveals something unexpected. This decline is not happening uniformly across the country. Some regions will continue to grow. Others will lose residents and workers at rates that approach crisis. The difference between them comes down to economics.

Regions that offer high-quality jobs, reliable childcare, efficient transport, financially stable municipalities, and a supply of skilled workers will attract people—both from abroad and from other parts of Germany. Those that lack these things will empty out. Berlin is expected to lead the way, with the capital's population rising by almost 10 percent by 2045. Hamburg, Frankfurt, Munich, and Düsseldorf in the west, along with Leipzig, Dresden, and Potsdam in the east, are also projected to grow. But several large western cities—Bremen, Duisburg, Dortmund, Kaiserslautern—whose economic appeal has faded, will shrink. The real losers are many sparsely populated regions, particularly in the east.

The shift is stark enough to reshape the map of German disadvantage. In 2019, five of the twenty worst-performing districts and independent cities were in eastern Germany. By this assessment, that number has risen to twelve. These same regions are expected to see their working-age populations fall by up to 18 percent by 2045. The competition for workers, the study concludes, will become one of the defining challenges of the coming decades. Bavaria and Baden-Württemberg, with their robust economies and strong labor markets, are positioned to weather the transition best. They are also more successful at drawing women, older workers, and people without German citizenship into employment—a sign that economically healthy regions are better at integrating diverse populations into the workforce.

The researchers are clear about what needs to happen: policymakers must stop treating Germany as a single demographic problem and start treating it as a collection of distinct regional challenges. What works for a growing major city will not work for a shrinking rural district. Local authorities need flexibility, less rigid regulation, and more financial resources to shape their own futures. This is where the analysis collides with political reality. Mayors and district administrators have long called for greater financial autonomy and a larger share of tax revenues. The federal government and the states cite their own budget constraints. Yet both sides acknowledge that Germany's system of fiscal federalism—the way money and power are divided between levels of government—will eventually have to change. The question is whether that change will come before the demographic window closes.