Empleo, capital humano y educación

The performance of Spain’s labour market has improved, approaching European standards, supported by a mix of reforms and demographic changes. Jobs are now much more resilient to recessionary pressures; yet, two key weaknesses remain, namely the relatively low chances for re-employment for jobseekers, making unemployment relatively persistent, and difficult school-to-work transitions which contribute to nurturing high youth under-employment.

Labour demand in Spain appears to have weathered the effects of the pandemic, as evidenced by sustained growth in job postings, despite a more significant initial drop in hiring compared to other countries in 2020. This, together with other trends, appears to support part of the recent acceleration in Spanish wage growth, underpinning a solid forecast for employment and GDP growth in 2024 relative to other advanced economies.

The fragility of the Spanish job market, characterised by a high incidence of temporary contracts and high structural unemployment, particularly impacting the Spanish youth, has led to an increased concentration of young people in major urban areas due to migration in search of work opportunities. However, less affordable housing in the cities is not only reducing the wealth of this age cohort but is accompanied by negative repercussions for society as a whole, which need to be addressed by public policies aimed to foster quality job creation, as well as affordable housing.