Spain | Employment remains dynamic, but challenges persist

Summary

According to the latest Quarterly Labor Market Observatory, published by BBVA Research and FEDEA, Spain's labor market continues to exhibit strong job creation, although persistent imbalances necessitate structural reforms. Employment growth must translate into greater productivity and equity.

Key points

• Key points:
• After rising by 0.7% in the first quarter of 2025, social security affiliation points to job creation of around 0.8% in the second quarter. This momentum coexists with a slowdown in the intensive margin of labor: although there are more people employed, they are working fewer hours, and productivity per employee is declining.
• Employment growth has helped drive unemployment down to levels not seen since 2008, despite a significant increase in labor force participation. This behavior is largely attributed to the growing importance of the foreign population.
• The Observatory also analyzes labor flows and the effects of the 2021 labor market reform on job turnover. In 2024, an average of 3.4 million people aged 20 to 59 (15.6% of the total) changed their employment status every quarter.
• In addition, despite a 10 percentage point drop in the employment gap between men and women over the last two decades and smaller gender differences in labor force participation among those aged 25 to 55, notable disparities remain.
• Even when comparing workers with similar characteristics, such as education level, age, and tenure, there are still significant wage gaps between men and women.

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