3.1 General context
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Labour market situation in the country
Legislation on labour matters in Spain is produced by the State, the exclusive agent for labour market regulation according to the Article 149.1.7 of the Spanish Constitution (Constitución Española). In this regard, Law 3/2012, of 6 July, on urgent measures for the reform of the market (Ley 3/2012, de 6 de julio) set the basis in order to favour employability of workers, the promotion of permanent contracts of employment and other measures. Through Royal Decree Law 32/20218 (Real Decreto Ley 32/2021), a labor reform has been implemented that reflects the agreement reached between the Government, the trade unions CCOO and UGT and the business organizations CEOE and CEPYME to structurally reform the labor market. The new regulation will lay the foundations for a labor market in which temporary contracts will be adjusted, for the first time, to European standards. The contract for work or service disappears. Contracts are presumed to be for an indefinite period, thus reducing the types of contract available.
The Spanish National Statistical Institute (INE) is the national body in charge of gathering data on labour market trends and their impact on the population. The INE is responsible for the Labour Force Survey (Encuesta de Población Activa, EPA). The data for Q1 2023 show 20,452,800 persons employed, with 3,127,800 unemployed, an activity rate of 58.55% and an unemployment rate of 13.25%. Among the under-30s, employment has fallen by 4,200 employed persons and the unemployment rate has risen to 22.61% in the first quarter. Employment stands at 2,870,900 jobs. The activity rate registered a quarterly variation of 0.16 points less, standing at 52.50%. Unemployment has increased by 16,600 persons, standing at 838,900 unemployed. The unemployment rate is 22.61%, 0.37 points higher than the previous quarter.
According to the 2023 report Youth and Labourt Market Report (Informe Jóvenes y Mercado de Trabajo 2023) from the first quarter of 2023, young people aged 16 to 24 account for 14.7% of the population aged 16 to 64 and 11.3% of the population aged 16 and over. The number of 16-29 year olds represent 22.9% of the population aged 16-64 and 17.5% of the population aged 16 and over. Since 2007, the youth population has progressively decreased, with a total loss of 160,300 persons in the 16-24 age group and 1,325,400 in the 16-29 age group, while the population as a whole has increased by 510,000 persons. This evolution is evidence, as has been shown in previous reports, of the process of population ageing that Spain is undergoing.
This evolution is evidence, as has been highlighted in previous reports, of the ageing process that Spain is undergoing, as is the case in the majority of European Union countries.
The Europe 2020 Strategy included a target to reduce the rate of early school leavers among 18-24 year olds to 10% in the EU-28 by 2020. In the case of Spain, the target was to reduce it to 15%. According to Eurostat data, the percentage of 18-24 year olds who did not continue their studies after completing lower secondary education has been on a downward trend since 2008 and until 2021, when the target set in the Europe 2020 Strategy was reached for the first time, with a rate of 13.3 %.
The drop-out rate has been on a downward trend since 2008 and until 2021, when the target set in the Europe 2020 Strategy was reached for the first time, with a rate of 13.3%.
In 2022, the early school leaving rate in Spain increased to 13.9%, 0.6pp above the rate in 2021. In the EU, this rate stood at 9.6%.
In the first quarter of 2023, the employment rate among 16-24 year-olds reached 24.4%; quarter-on-quarter it decreased by 0.5 pp and annually it increased by 0.1 pp. For 16-29 year-olds, the employment rate stood at 40.6%, down 0.3 pp quarter-on-quarter and up 0.2 pp year-on-year.
Although in 2011 the youth employment rate between men and women practically converged, in the following years it has maintained a small gap in favour of men. In the first quarter of 2023, among 16-24 year-olds, this gap reaches 2.86 pp. And among 16-29 year olds, 2.95 pp.
Youth employment is concentrated in the services sector. In the first quarter of 2023, employment in this sector accounted for 79.9 per cent of employed 16-24 year-olds and 80.6 per cent of employed 16-29 year-olds.
Main concepts
The workforce in Spain is defined as people of 16 years of age or over who, during the reference week (previous to that when the survey was carried out), were involved in the production of goods and services or were available and in the condition to join such production. They are subdivided into employed and unemployed people.
Employed persons are people of 16 years of age or over who, during the reference week, have worked for at least one hour in exchange for payment, either money or in kind, or those who, having a job, have been temporarily out of the same due to illness, holiday, etc.
The unemployed are people of 16 years of age and over who, during the reference week, have been out of work, available to work and actively searching for employment. People who have already found a job but are still waiting to start working are also considered to be unemployed as long as they meet the first two conditions.
The long-time unemployed are people who have been out of work for over a year.
The inactive are people of 16 years of age or over not included in any of the previous categories.
Discouraged workers are people who do not have a job and are looking for a job as they believe they will not find it, whether they have or have not looked for it before, although they are available for work.
‘Ninis’ are young people of up to 24 (29 in many cases) years of age who do not work or study, or follow any type of training either. This is the Spanish equivalent to the NEET category (not in employment, education or training).