Claudia Ramírez Bulos
OECD
Dimitris Mavridis
OECD
Aida Caldera Sánchez
OECD
OECD Economic Surveys: Spain 2025
Abstract
Spain is facing a dual labour market challenge: a rapidly ageing population and low employment rates for older workers. These trends risk reducing labour supply, slowing potential output growth and increasing fiscal pressures. Better mobilising the untapped potential of older workers and improving labour market integration of migrants, who have contributed to significant job creation and GDP growth in the past years, can help counteract some of the demographic pressures. Recent reforms have taken steps to address these challenges by promoting longer working lives through more flexible retirement pathways and improving the integration of migrants via expanded legal channels and streamlined regularisation. Building on these reforms, further efforts are needed to strengthen incentives for older workers to remain active, promote lifelong learning, while maintaining incentives for rapid re-employment. Also, better aligning migration and skills policies with Spain’s evolving labour needs is required, while fostering migrant integration through robust support in language and occupational training, as well as job placement. Enhancing the strategic responsiveness of the migration system by streamlining procedures and lowering bureaucracy for hiring from abroad and for degree recognition could attract more talented migrants. In addition, more efforts are needed to ensure early and successful integration of second-generation youth.
3.1. Spain’s labour market has shown impressive strength in recent years. Job creation has been robust, and the economy has rebounded strongly (Chapter 1), supported by strong migration flows. Between 2021 and 2023, net migration reached record levels, contributing significantly to employment growth and helping to ease labour market shortages in some sectors. Yet, despite these positive developments, Spain faces deep rooted structural labour market challenges including high unemployment, in particular youth and long-term unemployment, skills mismatches, and an ageing workforce that hinder productivity. Spain enjoys one of the highest life expectancies in the world, while fertility rates have dropped significantly. As a result, population ageing is advancing faster than in most other OECD and EU countries. Although estimates vary, all projections point to an important increase in the old-age dependency ratio by 2054, with OECD estimates suggesting there could be nearly three people aged 65 and over for every five of working age—a rise of around 41 percentage points since 2024, and among the steepest increases in the OECD. Eurostat and Spain’s National Statistical Institute project an upward trend, although with more moderate increases (Figure 3.1, Panel A). This demographic shift will reduce labour supply, slow potential output growth, weigh on government and public services with and ageing civil service, and place growing pressures on public finances, particularly through the pension and health care system.
3.2. While participation rates are in line with peer countries, Spain’s overall employment rate remains well below the OECD and EU averages (Figure 3.1, Panel B). Despite recent progress, unemployment is the highest in the euro area at about 10.5%, especially high among youth (see Chapter 1). Moreover, there are significant employment gaps across several population groups including the low skilled, youth, foreign-born workers, particularly women, and older workers (Figure 3.1, Panel C). To sustain GDP growth, boost per capita GDP growth and ensure fiscal sustainability over the long term, Spain must both increase employment and boost productivity (see Chapter 2).
3.3. This chapter focuses on two population groups with untapped employment potential: older workers and migrants. Older workers make up a growing share of the population, and recent reforms—such as partial retirement and the employment support supplement—have been designed to support the sustained employment of this group. However, their employment rate drops sharply after age 55, due to factors such as health, skill obsolescence, limited flexible work arrangements and age dependent public transfers. Migration flows have been historically high over 2023-2024 (Figure 3.1, Panel D) and migrants have accounted for 45% of Spain’s net employment growth in recent years, but they often face underemployment, overqualification and barriers to career progression and have the potential to work in more added value jobs. It is also crucial to focus on the integration of second-generation youth, by supporting access to quality education and early labour market opportunities, as this group risks facing persistent disadvantages if not reached early. Strengthening the labour market outcomes of both groups can help offset some of the demographic drag and support sectors facing labour shortages. However, it will not be enough to foster GDP convergence. For example, reversing demographic ageing through migration alone is unrealistic. Bank of Spain’s estimates suggest that over 24 million new working migrants would be needed by 2052 to maintain today’s demographic balance (Bank of Spain, 2024[1]). Therefore, Spain will also need to continue fostering labour market outcomes for women and youth, as discussed in the 2023 OECD Economic Survey of Spain (Table 3.1), by, among others measures, improving the school-to-work transition, aligning training offers more closely with labour market needs, expanding access to quality early childhood education, and strengthening collaboration with firms to offer apprenticeships for young workers (OECD, 2023[2]). Many of these measures are part of the latest vocational training reform, which has introduced a fully dual model and better aligned educational offerings with labour market needs. Implementation began in the 2024–2025 school year, but it is still too early to fully assess its impact, and ongoing monitoring will be essential to ensure the reform achieves its intended goals.
Note: In Panel A, the calculation of the old-age dependency ratio is based on UN projections (OECD estimates) and INE projections (Eurostat estimates).
Source: OECD Pensions at a Glance; Eurostat; INE; OECD Labour force statistics.
3.4. Older workers in Spain leave the labour market relatively early and inactivity rates and long-term unemployment are also high among older workers (Figure 3.2, Panels A and B). Spain’s employment rate for older workers (aged 55-64) has improved over the past two decades but remains low, particularly for highly educated individuals compared to EU countries, according to OECD data. Moreover, while unemployment rates among older workers are broadly in line with those of other age groups, older individuals face much longer unemployment spells. The current labour market challenges faced by older workers also reflect the lingering effects of the financial crisis, which led to a sharp increase in unemployment in Spain. Many workers who exited the labour market during that period never re-entered, and the experience left a legacy of skills erosion, discouragement and limited re-employment opportunities, particularly for those with lower education and who lost jobs in hard hit sectors like construction. Many older workers have traditionally exited the labour market permanently upon job loss, often treating unemployment benefits as a de facto early retirement scheme —although recently labour force participation and employment show some improvement for those 60-64 years, with the activity rate increasing 8.8 percentage points from 2019 to 2024. Inactivity rates have declined overall but remain high for those aged 55-64, with many leaving work well before reaching the statutory retirement age. This reflects not only pension design, but also weak reemployment incentives following unemployment, limited investment in older workers’ employability and low demand for older workers.
Source: OECD Labour force statistics.
3.2.1. Disincentives in the benefit system discourage the employment of older workers.
3.5. The design of unemployment benefits continues to generate substantial disincentives for older workers' employment. Spain’s unemployment benefits consist of two main tiers: contributory unemployment insurance (UI, prestación por desempleo) and non-contributory unemployment assistance (UA, subsidio por desempleo) for those who exhaust their insurance entitlements or do not qualify (Box 3.1). For those aged 52 and above, unemployment assistance has unlimited duration, is not means-tested at the household level but at the individual level and comes together with social security contributions of 125 percent of the minimum contribution base, provided they meet all the criteria to be eligible to the contributory old-age pension, except the age. This contrasts with the rules for younger workers for whom the programme has limited duration (from 3 to 30 months), is means-tested at the household level and does not include social security contributions.
3.6. As of June 2025, there were 766,511 beneficiaries of unemployment assistance, that is around 45% of the total number of unemployment beneficiaries. Among beneficiaries of unemployment assistance, over 70% are 50 years old and over (Figure 3.3), whereas they represented around 52% in early 2017. Therefore, it is essential to reform the non-contributory unemployment assistance so that workers of all ages receive equal support, restricting pension accrual to the unemployment insurance phase only.
3.7. While the greater generosity of UA provides an extra insurance against poverty at older ages, some studies have found that it can also reduce the job search incentives of older workers, especially among those with low potential earnings (Domènech-Arumí and Vannutelli, 2025[3]; Arranz and García-Serrano, 2023[4]). Moreover, those aged 52 and above on unemployment assistance accepting a low-paid job can negatively affect their future pension entitlements. In 2024, Spain enacted a reform of its unemployment benefit and assistance system aimed at improving work incentives and activation (Chapter 1). It increased the unemployment assistance subsidy during the first twelve months (EUR 590 per month, the first six months and EUR 540 per month, the next six months). The reform does not apply to the subsidy for job-seekers aged 52 with their benefit remaining unchanged at EUR 480 per month until they reach retirement age. The reform also created an Employment Support Complement, which allows beneficiaries to continue receiving part of their unemployment subsidy for up to six months after taking up work. This measure is intended to offset financial disincentives to return to employment especially for those facing long periods of joblessness. While the reform was a step in the right direction, the CAE is only available after a minimum unemployment spell of nine months for beneficiaries of the unemployment insurance. This delayed eligibility risks undermining the reform’s objective by incentivising prolonged unemployment, particularly for older or long-term unemployed individuals. Making the activation bonus available earlier in unemployment spells with higher initial bonuses that taper over time could accelerate employment transitions.
3.8. The participation tax rate (PTR) —the implicit tax burden a non-employed person faces when moving into work— is high for older workers in Spain, thereby compounding the existing disincentives to take up employment. A 52-year-old unemployed individual considering a minimum wage job can face effective tax rates exceeding 100%, driven both by the loss of the unemployment subsidies and the implicit 125% pension contributions linked to these benefits. Although the recent Ingreso Mínimo Vital (IMV) reform has lowered marginal tax rates for households with incomes below the 60% of the SMI entitlement, marginal tax rates remain high for childless households (Hyee and Immevoll, 2022[5]).
Note: Unemployment benefit refers to assistance and excludes the contributory unemployment benefit.
Source: Servicio Público de Empleo.
3.9. Job search conditionality is generally more lenient for older workers in practice. A 2023 legal reform replaced previous objective criteria, such as the 30 km rule, with case-by-case assessments based on individual characteristics, such as qualification and personal circumstances. While this approach allows flexibility, it lacks clearly defined standards, which may result in more lenient enforcement for older workers, particularly in cases of retraining difficulties or perceived aged discrimination. This, in turn, can reduce job-search pressure and affect reemployment outcomes. Occupational matching criteria are similarly relaxed, allowing older workers greater discretion to reject employment opportunities based on retraining difficulties or perceived age discrimination. This leniency reduces job search pressures for older workers compared to younger workers, as suggested by recent studies (Arranz and García-Serrano, 2023[4]; Domènech-Arumí and Vannutelli, 2025[3]). Monitoring may be required to ensure that conditionality is enforced consistently across age groups.
3.10. To address these age-based disincentives, the duration of non-contributory unemployment assistance benefits should not be age dependent. Pension contributions should be limited to unemployment insurance beneficiaries and not extended to unemployment assistance recipients. Active job search is currently a requirement to receive unemployment benefits. However, further efforts are needed to ensure compliance and participation in activation programmes to prevent long-term dependency and labour market detachment. Introducing comprehensive household means-testing for unemployment assistance across all age groups would target support more effectively, enhancing equity and resource efficiency.
Spain’s unemployment benefits consist of two main tiers: contributory unemployment insurance (UI, prestación por desempleo) and non-contributory unemployment assistance (UA, subsidio por desempleo) for those who exhaust their insurance entitlements or do not qualify.
The benefit begins after 12 months of contributions, and the right to UI benefits can last up to a maximum of 24 months. After finding a job, recipients may also continue to combine work income with benefits for 6 months, following a recent reform (Chapter 1).
UA is accessible after the expiration of the earnings-linked UI. It is means-tested at the individual level for older workers, and at household level for prime-aged workers. For those aged 52 and above, UA has unlimited duration and comes together with social security contributions of 125% of the minimum contribution base. The implication is that for those aged 52 and above, each month on UA counts as a month employed full-time above the minimum wage, for the calculation of future pension entitlements. For younger workers, the programme has limited duration (from 3 to 30 months) and does not include contributions.
A 2024 reform raised the monthly assistance from EUR 480 to EUR 570 per month for the first six months, then EUR 540 per month for the next six months, and EUR 480 per month for the remaining period.
Source: Unemployment benefits, Government of Spain.
3.2.2. Encouraging longer working lives through pension reform
3.11. Spain’s pension system has historically discouraged continued employment beyond the statutory retirement age, placing additional pressure on the pension system by reducing the number of employed individuals. Reforms since 2011 have gradually raised the statutory retirement age from 65 to 67 (phased in during 2013-27) and extended the contribution period for the calculation of pension benefits. National estimations suggest that the effective average age of entry to the pension system in Spain has increased in recent years to 65.2 in 2025. Moreover, the pension reforms in 2021 and 2023 introduced schemes to incentivize late retirement and discourage early retirement, leading to a shift in retirement patterns. Early retirements fell from 44.5% in 2016 to 29.6% in 2024, while late retirements rose from 4.4% to 9.3%. At the same time, older workers’ activity rates have improved between 2019 and 2024. Although the proportion of new pensions claimed after the statutory age has risen in recent years, part of this increase reflects cohort effects — better health, higher educational attainment and a shift towards less physically demanding occupations — that are lifting retirement ages across OECD countries Nevertheless, until recently, legal restrictions, limited flexibility, and implicit tax penalties made it unattractive for retirees to work while receiving a pension.
3.12. In April 2025, Spain implemented reforms to make retirement more flexible and increase incentives to work beyond the statutory retirement age. Previously, combining work and pension receipt was only possible for individuals with long contribution careers who deferred retirement by at least one year, with only partial pension benefits paid during employment and no deferral bonus. Under the new rules, this option has been opened to all individuals entitled to a pension (regardless of contribution history), provided they defer retirement by at least one year.
3.13. The reform also introduces a more gradual payout structure: after one year of deferral, individuals can receive 45% of their pension while continuing to work; after five years of deferral, the full pension can be received. In addition, the deferral bonus is now more flexible, increasing the pension by 2% for every six months of work beyond 18 months of deferral (previously 4% per full year).
3.14. Partial retirement rules were revised to improve flexibility and support intergenerational work transitions. Workers can now enter partial retirement up to three years before the statutory retirement age (versus two previously), while employers must hire a permanent full-time replacement. The goal is to encourage gradual exit from the workforce rather than early full retirement, adding flexibility, and support intergenerational employment, where older workers reduce hours and younger workers are brought in.
3.15. While these reforms move Spain closer to international practices that promote longer working lives questions remain about their administrative complexity and the extent to which they eliminate disincentives for combining work and pension. Increases in pension entitlements have coincided with rising take up. However, it is difficult to isolate the impact of the reform, as other factors, such as better education, improved health and changing job characteristics among later cohorts also contribute to longer working lives. Moreover, responses to pension incentives may still be shaped by behavioural inertia and limited awareness and understating of entitlements. To support more effective use of these options, streamlining the application and benefit calculation processes to make the system more accessible and understandable for all users, personalised guidance, raising awareness and improving access to training, job placement and flexible work arrangements for older workers could help older workers make more informed decisions. Close monitoring and on-going evaluation will be key to assessing whether the reform is achieving its objectives and the new phased retirement options are effective in raising employment and reducing early labour market exits.
3.2.3. Creating an enabling environment for older workers
3.16. Between 2018 and 2024, the minimum wage rose by approximately 61%, outpacing inflation and labour productivity growth (See Chapter 1). These increases have reduced wage inequality and alleviated in-work poverty (Arranz and García-Serrano, 2023[4]), (Arribas Cámara, Cárdenas and Rial, 2024[6]), and earlier evidence suggests limited or unclear effects on employment. Yet, as the minimum wage in Spain’s has significantly increased, the minimum-to-median wage ratio is becoming more binding, and negative effects on employment may begin to emerge. Continued increases warrant careful monitoring to assess potential impacts on employment, or on hours worked in low productivity sectors, particularly of older workers, as explained in Chapter 1.
3.17. Employer perceptions and age discrimination further compound labour market barriers for older workers (McKenzie, 2024[7]). Surveys indicate that older workers in Spain frequently face stereotypes regarding lower productivity (Carral and Alcover, 2019[8]), reduced adaptability to new technologies, and higher absenteeism due to health concerns (Quesada and Martinez de Lafuente, 2024[9]). These negative employer perceptions significantly diminish older job seekers' chances of obtaining employment, even when qualified. Older applicants receive fewer callbacks and employment opportunities compared to younger counterparts, despite equivalent qualifications and experience (Neumark, Burn and Button, 2019[10]). Addressing these biases through targeted employer awareness campaigns and strengthened anti-discrimination enforcement is essential for enhancing older worker employment rates. For example, in Austria the public employment service advises companies on age-friendly practices and workforce planning, aiming to reduce early exit from the labour market and improve retention of older workers (OECD, 2025[11]).
3.18. Greater access to flexible working-time arrangements could further support longer working lives. Experience in other OECD countries shows that wider access to part-time, remote or phased-retirement arrangements prolongs participation but may reduce hours worked per person. Dutch evidence, for instance, indicates that while flexible schedules raise employment among 60- to 64-year-olds, participants’ weekly hours fall by about one-quarter, limiting the increase in aggregate labour supply (Gielen, 2008[12]). UK studies report similar patterns (Lain and Vickerstaff, 2014[13]).
3.19. Health limitations become increasingly relevant with age and can reduce older workers’ ability to remain in the labour market without adequate adaptation measures. In Spain, nearly 35% of individuals aged 55–64 reported long-standing health problems in 2023 (EU-SILC data). Workers in physically demanding jobs—more common among lower-educated older workers—face disproportionate barriers to extending their careers (OECD, 2020[14]). Age-friendly work environments, such as ergonomic adjustments, part-time or flexible scheduling, and gradual return-to-work schemes after illness are of critical importance to enable healthier and thus longer working lives (OECD, 2020[14]). Spain lags other OECD countries in the uptake of such practices. Promoting longer working lives will require stronger incentives and guidance for employers to implement health and safety measures adapted to older workers’ capacities, alongside more proactive occupational health services, particularly in SMEs.
3.2.4. Upskilling and improving lifelong learning opportunities
3.20. Participation in activation, training and lifelong learning programmes among older workers remains limited, reducing employability and compounding skill obsolescence (Figure 3.4, Panel A), and participation is higher when in the form of in-person training leading to certification (Figure 3.4, Panel B). Improving the labour market opportunities of older workers requires a better match between older workers’ skills and labour market needs. This can be achieved through strengthened active labour market policies for the unemployed and targeted training programmes for those employed, with a particular focus on sectors facing the greatest demand for skilled workers. Such measures not only enhance employability but also help attract talent where it is most needed. Participation in adult learning is comparatively low: only 27% of workers aged 55‑65 take part in non-formal training over the year, compared to an average of 32% across OECD countries. Moreover, the participation gap between older and prime‑age workers in Spain is the largest among the major OECD economies, at nearly 19 percentage points – well above the OECD average of 16 (Figure 3.4, Panel A). This gap reflects both demand- and supply-side constraints: older workers are less frequently offered training by employers and often lack incentives or support mechanisms to participate. Public employment services (SEPE) offer training programmes, but they are mostly focused on the unemployed, offering limited access to reskilling programmes for mid- and late-career workers, and poorly aligned with employers’ needs. The plan to modernise VET includes adult learners but, despite on-going implementation, the uptake by older workers remains weak. The transformation of the VET system included significant reforms, such as expanding the range of training available and breaking it down into different levels to offer shorter, more modular options. These reforms aim to benefit all citizens, with a particular focus on those who require more tailored training opportunities, such as older workers. Nevertheless, public programmes aimed at lifelong learning remain fragmented across regions and are under resourced. Moreover, older workers are underserved by active labour market policies, despite facing the highest risks of long-term unemployment.
3.21. Digital skills are increasingly essential in almost every job, yet older workers in Spain rank poorly. Nearly one-third of those aged 55–65 lack basic computer skills, and only a small minority have ever used problem-solving in technology-rich environments (OECD, 2024[16]). Without targeted digital training, this gap risks widening and accelerating early exits from the labour market.
Note: Panel B: surveyed countries include the Czech Republic, France, Romania, Spain, Sweden and the United States.
Source: OECD Employment Outlook 2025; Generation & OECD (2023), Survey of employers and midcareer & older individuals.
3.22. To boost employment opportunities for older workers, targeted lifelong learning and digital upskilling initiatives must be prioritised, together with active labour market policies more tailored to older workers’ needs. The reform to the VET system significantly expanded formal, accreditable vocational training for both employed and unemployed individuals, offering flexible, modular options tailored to diverse backgrounds and needs. However, participation in adult learning programmes specifically tailored to older workers remains a challenge (Figure 3.4, Panel A). To boost participation in lifelong learning, Spain could build on recently introduced training microcredits offered by Fundae to expand individual training accounts or vouchers for older workers particularly those in low-wage or at risk-sectors. International experience shows that if well designed learning accounts help workers upskill (OECD, 2019[17]), (OECD, 2022[18]). To ensure impact, Spain should link training vouchers to labour market needs, provide support through public employment services and prioritise accessibility for older adults through flexible, modular course formats, particularly on sectors facing the greatest demand for skilled workers. To simplify the system, a dual training voucher scheme could be introduced—supporting older people in lifelong learning and empowering SMEs to upskill their workforce within a single, interoperable national platform, as explained in Chapter 2.
3.23. To strengthen digital skills, Spain could integrate digital literacy into adult learning and activation programmes, offering modular and accessible courses tailored to older learners, coupled with incentives for SME participation, especially in roles at risk of automation. Beginner-friendly courses on practical digital skills—such as online banking and communication apps—could be supported through intergenerational mentoring programmes, pairing seniors with young volunteers, as seen in Australia’s Youngster.co initiative. Ensuring age-friendly delivery, including in person support, flexible scheduling and community-based access points, will be key to uptake and success. Spain could follow best practices from Finland, which embeds digital training into broader upskilling programmes, and Denmark, where local job centres provide dedicated digital boost courses for workers aged 50+. Spain’s active labour market policies could be strengthened by developing specific activation pathways for older workers, with tailored, age-sensitive employment support and retraining.
3.24. Spain is now one of Europe’s main immigration destinations, with the foreign-born making up 18% of the total population in 2024, a share comparable to Germany and Belgium. Migration has helped offset the decline in the native-born population (Figure 3.5, Panels A and B) and has been a major driver of employment growth: from 2022 to 2024 foreign born workers accounted for approximately 45% of total employment growth (SEPE, 2025[19]). Immigration has also supported macroeconomic performance. Migrants filled a large share of new jobs, with the number of employed foreign born rising by 6.9% in 2024, compared to just 1.4% among Spaniards, contributing around 0.7 percentage points to annual GDP per capita growth between 2022 to 2024, primarily through the increase in the employment rate among foreign born workers (Cuadrado and Regil, 2025[20]). These demographic trends are expected to persist, with migration projected to partially offset the shrinking native population growth (INE, 2025[7,]). However, the long-term benefits of migration depend on the successful integration of migrants into quality jobs and their ability to contribute fully to the economy and society. Three priorities are essential: improving labour market integration, reducing underutilisation of migrant skills and aligning the migration system more closely with labour market needs, particularly considering the retirement of the baby boom generation.
3.3.1. Enhancing the labour market integration of migrants
3.25. Spain’s labour market integration of migrants shows both strengths and structural gaps. Labour force participation among immigrants remains high, 69.3% in 2025Q3 compared to 57.6% among native workers, among the highest in the EU. Migrants are predominantly of working age and often find jobs quickly upon arrival, especially those from Latin America, who benefit from linguistic and cultural proximity. Around 68% of migrants find employment within one year of arrival (Cuadrado, Luis Gómez and Sastre, 2024[21]).
Age distribution of the native- and foreign-born, 2024
Source: INEI.
3.26. However, these positive indicators obscure persistent gaps in job quality and inclusion. Migrants are heavily concentrated in low productivity and low pay sectors such as agriculture, hospitality, construction and domestic work, often regardless of their education and professional background (Figure 3.6, Panels A and B). Informality among undocumented migrants is important, as they typically lack access to social protection, face poorer working conditions and earn lower wages (MMC, 2025[22]). The number of temporary contracts among migrant workers fell from 88% in 2021 to 43% in 2023. Despite this remarkable progress, among those with legal status, temporary contracts and part-time employment are more common than for nationals. Unemployment among non-EU migrants is also higher at 18.4% in 2024, compared to 10% for Spanish nationals. Over half of non-EU residents were at risk of poverty, versus 21% among the native-born (Figure 3.6, Panel C).
Source: Eurostat; INE.
3.27. Integration challenges extend beyond the first generation. Children of immigrants are more likely to face disadvantages in education, with higher dropout rates and lower academic achievement compared to peers with native born parents (OECD, 2023[23]). Key drivers include lower family income, school segregation, lower parental education, and limited access to educational resources. Without early and sustained educational support, these youth may face a future of continued labour market precarity. Policies should promote school integration by avoiding concentration of migrant students, providing targeted remedial education, and ensuring access to language training and tailored learning support.
3.28. Migrant women face specific and often compounding barriers to labour market integration, marked by lower employment, higher unemployment, job informality and sectoral segregation. As of 2024, the unemployment rate for non-EU migrant women stood at 17.8%, compared to 12.7 for Spanish women. They are disproportionally concentrated in low-paid jobs, such as domestic work, caregiving and hospitality, where work arrangements are often temporary and legal protection limited. Nearly 20.9% of non-EU migrant women hold temporary contracts, higher than both migrant men (18.9%) and native-born women, and they are more likely to work part-time. Many lack autonomous legal status, depending on a spouse or employer for residence permits, which limits their ability to change jobs or leave abusive situations (AIETI & Red de Mujeres Latinoamericanas y del Caribe, 2020[24]) (Barrerira et al., 2022[25]). Migrant women are especially vulnerable to the "child penalty" (Sánchez-Dominguez and Guirola Abenza, 2021[26]). Unlike native women, who often retain their jobs through long-term employment relationships and flexible arrangements with employers, migrant women—typically in short-term or precarious work— cope with care responsibilities by dropping out of employment altogether, reducing their labour market participation more than for native women. This highlights the relevance of continuing the expansion of affordable and quality childcare, as recommended in the 2023 Economic Survey of Spain, which remains essential to supporting the labour market participation of women, especially those in vulnerable or migrant situations.
3.29. Combined with their caregiving responsibilities and limited access to upskilling or language training, these factors reduce their labour market integration and increase their vulnerability to exploitation. To address this, Spain should facilitate earlier access to residence permits of women in vulnerable situations to improve integration. Providing targeted outreach, clear information, legal assistance, and streamlined administrative pathways would support inclusion. Moreover, expanding targeted training and job placement support to help migrant women access more diverse and stable employment beyond domestic and care sectors, would support their labour market integration and mobility.
3.30. Spain has recently introduced reforms, including the 2024-2025 Immigration and Integration Law and has strengthened the initiatives for hiring seasonal and circular migrant workers in origin. Spain’s Foreigners Regulation reform, approved in November 2024, modernized Spain’s migration system, focusing on integration, simplified procedures, improving labour market access for migrants, and expanding regularization pathways. Additionally, the Collective Management of Recruitment at Origin (GECCO) which is part of Spain’s broader migration policy, offers important benefits such as legally recruited workers, multiyear visas and support for circular mobility and was also reformed. Recent reforms have aimed to strengthen worker protection, such as contract renewals with the same employer, accommodation standards, and flexibility for linking agricultural seasons, shifting away from natural-year contracts to ones with clearly defined start and end dates, better aligned with agricultural periods. In 2025, Spain expanded the programme through pilot projects in Mauritania, Gambia, and Senegal, aiming to strengthen circular migration. Additionally, the WAFIRA programme, which is a pilot initiative operating within GECCO, was designed to empower Moroccan rural women who participate in seasonal agricultural work in Spain. They receive entrepreneurship training, financial education, and soft skills development before departure. Both programmes have helped promote legal and orderly migration while supporting meaningful integration. By focusing on rights, training, reintegration, and building institutional trust, they provide a strong foundation for scalable, socially responsible migration models. Continuous evaluation of the programmes and drawing from the experience of those that have proved successful, such as the GECCO ones (ILO, 2025[27]), could be used to extend the programmes to additional countries and sectors. This could improve both labour market integration and the sustainability of circular migration. Additionally, and to more generally support effective integration, further efforts should focus on scaling up tailored services in language training, job placement and vocational orientation. Local initiatives, such as Madrid’s migrant employment workshops, could be expanded. Stronger coordination between public employment service and local organisations could activate immigrants not currently in employment, education or training.
3.31. Spain is increasingly attracting more highly educated migrants but is failing to harness their skills. Around 50% of foreign-born workers with tertiary education were employed in low or medium skilled jobs (Figure 3.7, Panel A), often in sectors like domestic work, hospitality and construction. This skills mismatch reflects systemic barriers such as lengthy, burdensome and unclear processes for recognising foreign credentials (Finotelli and Rinken, 2025[28]) (Martín and Ramalho da Silva, 2024[29])). For example, highly qualified migrants (e.g. doctors engineers or teachers) may wait years to get their credentials recognised, or face additional exams and bureaucratic hurdles, during which time many end up taking lower skilled jobs. Enabling qualified migrants to work at their skill level would boost productivity, spur innovation, and improve job satisfaction while also making Spain a more attractive destination for global talent.
3.32. Despite 2022 reforms to streamline the homologation process for foreign university degrees, many migrants still face long delays, uncertainty and opaque criteria when attempting to validate degrees. Since then, the number of resolved homologation cases has nearly doubled, with the goal to process 80,000 homologation cases by 2025. Expanding staff in validation services, digitalising the application process and setting clear timelines would improve access and transparency enabling immigrants to access jobs aligned with their skills. Many Spanish universities offer administrative assistance, guidance on documentation, and help with the application process for homologation, especially when additional training or exams are required. Integrating more fully universities in the validation process, currently led by the Ministry of Universities, could help international students and professionals understand the steps, documentation, and potential work and academic opportunities in Spain, like in France and Germany, where universities play an important role in degree recognition. Expanding bilateral or multilateral agreements with key countries to automatically recognize certain qualifications to expedite recognition processes could also be explored.
3.33. In parallel, introducing competency-based evaluations, such as Australia’s Recognition of Prior Learning, even if costly, would help migrants who cannot formally document their skills. Skills profiling at arrival, combined with job placement support and public-private partnerships to deliver short and flexible courses could help migrants meet local certification standards and connect with employers facing skills shortages. Some countries like Canada, Norway and Belgium run skill bridge initiatives linking immigrant professionals with local mentors or fast track internships, and Spain could consider similar schemes.
Source: OECD, 2023, Indicators of immigrant integration, and CEDEFOP.
3.3.2. A more responsive and strategic migration system
3.1. Spain’s migration system has historically had limited alignment to actual labour shortages and often has been reactive, leading to mismatches and large informal workforce. For much of the 2000’s, this system struggled to respond swiftly to new labour demand, for example booming sectors like care of the elderly and often faced work shortages. Spain’s demographic trajectory means that labour supply will tighten in coming years, not only in terms of numbers, but also in terms of skills. The retirement of the baby boom generation is expected to create over 15 million job openings by 2035, many in medium and high-skilled occupations (Figure 3.7, Panel B) (CEDEFOP, 2025[30]). The existing migration model, which has effectively filled low wage jobs, must evolve to better address these gaps. A more strategic skills-based approach to migration will be essential to foster productivity.
Adapting the migration framework
3.34. In recent years Spain has taken steps to modernise and streamline its migration framework. Reforms since 2022 aim to make the system more agile and aligned with labour market needs. Key changes include the simplification of legal pathways and the creation and expansion of visa categories to attract workers and students. For example, a specific job seeking visa was introduced, allowing migrants to enter Spain to look for work in shortage occupations, valid 12 months to enhance chances to find a job. Moreover, initial work/residence permits are now granted for 1 year (renewable for up to 4 years) to provide greater stability for both migrants and employers. Administrative procedures for employers to hire foreign talent have been streamlined. A dedicated seasonal work permit contract was created to facilitate repeat hiring of foreign seasonal workers with provisions to protect their rights. The arraigo system (roots-based regularisation) has also been expanded to include new categories enabling faster regularisation for migrants with social, family and educational ties to Spain, reducing the required time of residence from 3 years to 2 years, making it easier for immigrants in irregular status to more swiftly obtain legal work permits. In particular, the arraigo sociolaboral now requires only a 20-hour work contract, the arraigo socio‑formativo allows study and work up to 30 hours per week, and a second‑chance arraigo is available for those who lost their permit recently. In 2024, over 313,000 individuals were regularised under arraigo, a 31% increase from the previous year. Additionally, in January 2025, the government also established an inter-ministerial commission to address irregular immigration.
3.35. While these reforms aim to address long-standing gaps, the system remains largely reactive. Overreliance on regularisation pathways, although often necessary, can entrench informality and generate legal uncertainty. Spain should prioritise simplifying pre-arrival work visa procedures, increasing bilateral labour agreements and strengthening oversight to reduce abuse. Moreover, to ensure the swift implementation of the recent regulatory changes, adequate resources should be devoted to immigration offices and consulates to speed up processing times for work permits and visas. Digitalisation of application processes could be used to reduce paperwork and corruption risks. Finally, increasing oversight to reduce the prevalence of precarious and informal contracts is key through more frequent, targeted, and well-resourced inspections, particularly in high-risk sectors.
3.36. The quota system and the catalogue of hard to fill occupations, while useful in principle, are underused and poorly aligned with actual labour market demand. Most work permits are issued to foreign workers identified directly by employers. 10% of work permits are issued through the quota system, a mechanism that establishes an annual limit on the number of non-EU foreign workers who can be recruited for employment in Spain, with selection done in cooperation with authorities in origin countries. The quota is negotiated by employers, unions, and the administration. This recruitment channel lacks flexibility, suffers from a heavy bureaucratic burden, and is not fully aligned with labour demand (Finotelli and Rinken, 2025[28]), but also because the anonymous centralized recruitment process many not align with employers typical hiring practices.
3.37. The catalogue of hard to fill occupations is published quarterly by the public employment service (SEPE) and if an employer wants to hire a non-EU worker for a job listed in the catalogue, the visa process is streamlined, which is in line with best practice approaches in France and some Belgian regions. In 2024 changes to the catalogue made the system more agile, by shortening the time to include occupations, and improving the methodology to identify these occupations. However, despite these improvements and quarterly updates, the catalogue often fails to reflect real-time needs. This may relate to how it is governed, with a strong role for public employment services and social partners to include an occupation on the hard-to-fill occupation lists (Finotelli and Rinken, 2025[28]). While hiring is still possible outside of the catalogue, the administrative burden and uncertainty may deter firms, especially SMEs, from using this channel. Expanding the catalogue to cover more sectors and professions, especially ICT, health care and other high demand areas is advisable, together with continued efforts to streamline the process for employers to report persistent vacancies and proposing new occupations to include.
Attracting and retaining high skilled workers
3.38. Spain’s ability to attract high-skilled talent remains limited. Only 1% of migrants entering Spain for work are classified as highly skilled and the country ranks low on the OECD Indicators of Talent Attractiveness (ITA) in 2023. While recent reforms have made it easier for international students to work after graduation, including automatic work permits for highly educated students, extended working hours, and the removal of the three-year residency requirement to switch from student to work permits, further measures are needed to make Spain more competitive for global talent, particularly as the demand for highly qualified workers in Spain is projected to increase.
3.39. Key improvements include simplifying the process for recognising credentials, including of professional qualifications, simplifying administrative procedures and digitalising visa processes. Spain should also more actively engage with European initiatives. Starting in 2023, Spain implemented the 2021 EU Blue Card Directive harmonising options for skilled workers. However, compared to countries like Germany (78% of total EU issuance in 2023), or France (4%), its uptake in Spain has been low (less than 0.01%) due to more accessible national permits with less stringent requirements. Yet, in terms of authorisations for non-EU citizens wishing to study or conduct research, in 2023 Spain ranked third in the EU, accounting for 12% of all such permits. It also ranked fifth in issuing intra-corporate transferee permits, which allow non-EU employees to be posted from companies operating outside the EU—a smaller but growing category. Continuing the promotion of the Blue Card to employers (especially in ICT, engineering and health sectors) and making full use of the flexibility allowed under the revised EU Card Directive to publish a list of shortage occupations benefiting from lower salary thresholds, would improve take up and position Spain as a more attractive destination of global talent. Finally, new initiatives like the EU Talent Partnerships and the forthcoming EU talent Pool could be leveraged to better match labour market needs with skilled candidates from abroad.
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