Spanish Labor Market: Employment Statistics and Unemployment

Posted on Jan 9, 2025 in Business Administration and Management (BAM)

Employment Statistics: Sources of Information

Sources of information on employment in Spain:

  1. Labor Force Survey (Encuesta de Población Activa – EPA): A quarterly survey conducted by the National Statistics Institute (INE) involving 64,000 households. It collects data related to existing employment, interviewing approximately 200,000 people for statistical purposes.
  2. Labor Situation Survey (Encuesta de Coyuntura Laboral): Prepared quarterly by the Ministry of Labor and Social Affairs, this survey samples 12,000 companies. It measures the evolution of unemployment rates in basic occupation sectors (agriculture, construction, and services).
  3. Social Security Affiliation Figures: Social Security is a public agency that guarantees healthcare and social benefits sufficient to meet the needs of workers and their families. To qualify for benefits, workers must be registered with Social Security. Information obtained from the number and characteristics of registered contracts is a crucial variable in deciding employment policies.
  4. SEPECAM Data: The State Public Employment Service (SEPECAM) measures unemployment, taking into account registered individuals. However, it excludes a large workforce with the ability and desire to work but who are not registered. These individuals are often referred to as “discouraged unemployed.”

Evolution of the Spanish Labor Force

The economically active population (EAP) represents a country’s workforce. It has grown significantly in Spain since the 1980s due to:

  • a) The arrival of the baby boom generation to the labor market: The strong birth rate growth during the 1970s led to a large number of individuals over 15 entering the EAP in the 1980s and 1990s.
  • b) Incorporation of women into the labor market: Changing employment structures in the 1970s and 1980s facilitated women’s access to the labor market.
  • c) Growth of immigration: In just four years, Spain transitioned from being a country of emigrants to receiving foreign labor.

Types of Unemployment

Unemployment is a serious problem for economies, resulting in high social and economic costs. The government’s priority is to minimize it. However, not all unemployment is the same. Depending on its causes, there are four main types:

  1. Cyclical Unemployment: This type of unemployment increases significantly during cyclical recessions and decreases during periods of economic expansion. To reduce its incidence, the public sector aims to soften the transition between economic cycles so that labor supply does not vary significantly.
  2. Seasonal Unemployment: This arises from the existence of activities that only require labor during certain times of the year.
  3. Structural Unemployment: This type of unemployment is a result of imbalances between labor supply and demand. Its origin lies in the technical inadequacy of workers or an excess of applicants for certain jobs. It is particularly important as it tends to persist.
  4. Frictional Unemployment: This is voluntary unemployment, where individuals stop working to study, rest, or find a better job.

Unions

Characteristics of the Population

Population of working age: In Spain, the minimum age for schooling is 16, so individuals of this age and older can work. There are two groups within the active population:

  • Employed: Those who are working, either as employees or self-employed.
  • Unemployed: Individuals of working age who are actively seeking work but cannot find it.

Inactive: Individuals of working age who neither seek nor wish to work. They are solely consumers.