Spain | Labor force participation after COVID: a cyclical recovery

Summary

Since the pandemic, Spain’s labour force participation rate has risen by 1.6 percentage points, reaching 59% of the working-age population in 2025. While the underlying trend is structural, most of the increase since 2020 reflects cyclical factors.

Key points

• Key points:
• Overall, participation has increased by 8.4 pp since 1992: it rose until 2012 (+9.7 pp), declined between 2013 and 2020 (-3.0 pp), and has picked up again since then (+1.6 pp), reaching 59% in 2025. The strongest gains have been among women, older workers (55–65), and foreign nationals.
• The post-2020 rebound in participation has been largely cyclical, unlike in the 2000s, when a similar migration backdrop was associated with a more structural increase.
• The recent cyclical boost is mainly driven by a higher propensity to participate and is concentrated among individuals with secondary or higher education, both Spaniards under 55 and foreign nationals aged 25 to 54.
• Looking ahead, population ageing will weigh on the structural trend, partly offset by immigration and rising educational attainment, as seen in other advanced economies.
• A projected slowdown in economic growth could bring the cyclical boost to an end by late 2026. Any further gains in participation are likely to be limited by adverse demographic dynamics.

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