Spain | Labor participation against the demographic clock

Summary

Labor participation has rebounded since 2020, driven by cyclical factors, immigration, and higher educational levels. However, this improvement is temporary and masks the structural trend resulting from population aging.

Key points

• Key points:
• During the 1990-2007 period, between 15% and 37% of GDP growth was explained by the increase in the labor force participation rate.
• The economy suffers from labor underutilization with high unemployment rates, involuntary part-time contracts, and temporary disability leaves that reach nearly 6% of the employed workforce.
• The foreign population shows a greater propensity to enter the labor market, with a 70% participation rate compared to 60% for the Spanish population.
• People between 25 and 54 years old, who have participation rates of 90%, went from representing more than 55% in 2008 to less than 50% today.
• The group over 54 years old, with a 70% participation rate, previously represented less than 30% and now exceeds 40% of the total.

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