Spain | A labor market in transition

Summary

The latest Observatory published by BBVA Research, FEDEA and the Sagardoy Foundation shows a labor market in transition in Spain. Job creation continues, but at a significantly slower pace than in the first half of the year.

Key points

• Key points:
• Social Security affiliation data for October and the first half of November point to a quarterly growth of between 0.2% and 0.3% QoQ SWDA in the fourth quarter.
• The effects of the labor reform in force since 2022 are becoming more moderate. The fall in the temporary employment rate has stopped. In the first three quarters of 2023, it stabilized at around 17% according to the Spanish LFS, and between 14% and 15% depending on Social Security affiliation.
• Labor market tightening continues. More and more occupations, companies and sectors face restrictions to meet a growing demand for employment.
• To ensure the convergence of employment, activity and unemployment rates to those of the best European countries, without hindering aggregate productivity, Spain must complement the 2022 labor reform with measures that promote the efficiency of active labor market policies and their link with better designed passive policies.

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