Infografía Capítulo 3 (Inglés)

CURRENT SITUATION

THE SPANISH LABOUR MARKET

Public sector

Momentum

Heterogeneity

Migratory flows

Temporary employment/stability

Productivity and ULCs

The unemployment rate fell to 11.8% at end-2023, although it remains excessively high compared with other European countries.

• Firms perceive labour shortages as one of the main constraints on their productive activity.

• The vacancy rate has been rising in recent years, and there are indications of labour supply shortages in several sectors and occupations, both low and high-skilled.

Signs of tightness in the labour market

STRUCTURAL TRENDS

TECHNOLOGICAL INNOVATION

AGEING

INCREASE IN PRODUCTIVITY

MIGRATION

DISPLACEMENT OF SOME WORKERS

LONGER WORKING LIVES

EDUCATION/TRAINING

CREATION OF NEW JOBS

IMPLICATIONS FOR LABOUR MARKET POLICIES

A labour market policy overhaul is a priority in light of the challenges facing the Spanish labour market posed by a persistently higher unemployment rate than other European countries, technological changes and population ageing.

Institutional framework

Labour market policies

Passive labour market policies

Active labour market policies

The ageing of the working population has a negative impact on employment and productivity growth, but decisive economic policy action could, at least in part, mitigate these potential adverse effects.

• Encouraging workers to prolong their working lives.
• Ensuring collective bargaining is sufficiently flexible.
• Making further progress on defining the objective grounds for dismissal and on reducing the uncertainty associated with these processes.
• Allowing for flexibility across firms and sectors if the statutory working week is adjusted.
• Assessing the impact of other potential changes to the elements comprising the institutional framework of the labour market on employment, labour costs and productivity.

Heterogeneity

The performance of employment has been mixed across sectors, occupations and geographical areas; and this heterogeneity is likely to intensify in the coming years.

• Encouraging workers to prolong their working lives.
• Ensuring collective bargaining is sufficiently flexible.
• Making further progress on defining the objective grounds for dismissal and on reducing the uncertainty associated with these processes.
• Allowing for flexibility across firms and sectors if the statutory working week is adjusted.
• Assessing the impact of other potential changes to the elements comprising the institutional framework of the labour market on employment, labour costs and productivity.

Momentum

Recent Spanish labour market developments have mainly been marked by employment’s considerable momentum, a trend also seen across a broad set of countries.

Temporary employment/stability

The temporary employment ratio of the Spanish economy has fallen sharply since the approval of the labour reform in 2021, although other indicators of employment stability have seen relatively modest growth.

Public sector

The share of public sector employees in total employment has increased since the outbreak of the pandemic, although most job creation has come in the private sector.

Productivity and ULCs

In contrast to employment, labour productivity has barely increased in the Spanish economy since the start of the pandemic. In Spain unit labour costs (ULCs) have grown more than in the euro area as a whole since 2019.

• Strengthening their coordination with active labour market policies so that, together, they ensure that the unemployed are adequately protected, while at the same time encouraging and facilitating their return to the labour market.
• Streamlining and improving the assistance offered by the unemployment protection system.
• Allowing certain benefits/subsidies to be compatible (for part of or their entire duration) with employment.
• Introducing changes to the duration of the benefits/subsidies and/or decreasing their amount over time, without reducing the level of protection ex ante.

Migratory flows

The recovery in migration flows, which were severely affected by the pandemic, has contributed significantly to recent employment momentum.

Throughout history, technological innovations have sustained and even boosted employment, but the technological change under way (in particular, robotics and artificial intelligence) differs from past examples in certain very important ways. In any event, its effects will materialise through three channels, the impact of which is hugely uncertain: