Transitional Phase in Mongolia’s Labour Market: Key Challenges and Policy Directions

Mongolia is currently undergoing a transitional phase in its labour market, with ongoing shifts in workforce dynamics and the impact of emerging technologies, particularly artificial intelligence (AI). This was discussed in the sub-council meeting on “Future Workforce Trends and the Impact of AI,” which reviewed research and information prepared by the Mongolian Wool and Cashmere Association.

 

The Economic Policy Council, led by Prime Minister L. Oyun-Erdene, comprises seven sub-councils, and the sub-council on “Future Workforce Trends and the Impact of AI” is chaired by Minister L. Enkh-Amgalan.

 

Recent labour market studies reveal that while 40,000–60,000 people remain unemployed in Mongolia, employers are seeking to fill 30,000–40,000 positions. This labour shortage is expected to continue until 2028, highlighting key issues:

 

1. Low wages and insufficient recognition of labour productivity

2. Demographic trends, with a decline in the working-age population.

3. Attitudes of Generation Z, which have influenced job market participation.

 

Moreover, researchers have noted a decrease in the number of young people seeking employment since 2016, attributed to the lower birth rates that began during Mongolia’s transition period in the 1990s. This demographic shift continues to have lasting effects on the labour market, requiring careful attention and policy responses.

 

Moving forward, addressing these challenges at the policy level will be critical to ensuring sustainable economic growth and workforce development in Mongolia.