OECD Employment Outlook 2025: Spain
Table of contents
This country note provides an overview of the labour market situation in Spain based on data from OECD Employment Outlook 2025. This edition has a special focus on how population and workforce ageing will affect the labour market and workers’ jobs.
The OECD unemployment rate remains at 4.9% in May 2025 – the same as one year ago. However, there are signs of weakening, with employment growth decelerating and labour market tightness falling back to pre‑COVID‑19 levels in many countries.
The Spanish labour market continued to improve in 2025, but unemployment remains a major challenge. The employment rate for people aged 15 to 64 reached a record high of 66.5% in the first quarter of 2025. This narrowed the gap with the OECD average to only 3.8 percentage points, down from nearly 10 points in the wake of the Global Financial Crisis. In contrast to most other large OECD economies, unemployment continued its downward trend in 2025, standing at 10.8% in May (see figure below). Despite this progress, Spain still has the highest unemployment rate in the OECD, more than twice the average.
Spain’s GDP is projected to continue growing, though at a more moderate pace than in recent years. After strong growth of 3.4% in 2024, the economy is projected to grow by 2.4% in 2025 and 1.9% in 2026, reflecting, in part, rising trade tensions. Despite this, solid domestic demand should continue to improve labour market conditions, with unemployment projected to decline further to 10.7% by the end of 2025 and 10.1% in 2026.
Since November 2024, Spain has granted workers up to four days of paid leave when authorities issue weather-related mobility restrictions or when extreme weather events make commuting unsafe, provided the job cannot be performed remotely. Employers are required to cover the cost of this “climate leave”. While this positions Spain among the leading countries in protecting workers from climate‑related disruptions, it also places additional costs on firms, which are often affected by the same extreme weather disruptions.
Real wages are growing in virtually all OECD countries, but in half of them, they are still below the levels of early 2021 – just before the inflation surge that followed the pandemic.
Despite a notable decline in unemployment in recent years, wage growth in Spain has not kept pace with inflation. Although nominal hourly wages rose sharply in 2023 and 2024, real wages in Q1 2025 remained 4.2% below their Q1 2021 level. This places Spain broadly in line with wage developments across the Eurozone, but lagging behind most large economies. Among the largest OECD economies, only Australia and Italy experienced a steeper real wage decline than Spain over the same period.
As in most OECD countries, low-wage earners in Spain have been relatively well shielded from the post-pandemic inflationary surge. By April 2025, Spain’s minimum wage had increased by 3.1% in real terms compared to January 2021. This growth is lower than the OECD average of 7.9% over the same period. Nonetheless, on a net basis, the Spanish minimum wage remains over 60% the median wage. The statutory minimum wage in Spain is set annually by the government following consultations with trade unions and employers’ associations, though these consultations are non-binding.
People around the world are living longer and healthier lives than ever before. This remarkable achievement has been accompanied by declining fertility, leading to significant demographic shifts. The number of old-age people per working-age person will rise by 67% by 2060 across the OECD. The share of people employed in the population will fall unless policies change, slowing down annual GDP per capita growth by 0.4 percentage points.
By 2060, baseline projections suggest Spain’s working-age population will shrink by 30%, and its employment-to-population ratio will suffer the steepest decline in the OECD – dropping 10.3 points compared with a 2 percentage point OECD average (see figure below). This sharp drop is partly explained by the country’s lower fertility rates and longer life expectancy relative to most OECD countries. As a result, the number of old-age dependents per working-age person will rise sharply from 0.34 in 2023 to 0.75 by 2060.
This demographic shift would have significant potential consequences for economic growth in Spain. If productivity growth remains in line with its 2006‑19 average, GDP per capita would increase by just 0.13% per year between now and 2060 – down from the 0.53% average recorded between 2006 and 2019.
However, by mobilising untapped labour resources – closing the gender gap in employment by at least two‑thirds, activating healthy older workers, and promoting regular migration – Spain could boost annual GDP per capita growth to about 0.73%, exceeding its recent historical trend. To match the 0.9% GDP per capita growth projected across the OECD if similar resources were mobilised, Spain would need further productivity gains.
Baby boomers have enjoyed significantly stronger income growth than younger cohorts over the past three decades. Unless we find a way to boost incomes of younger cohorts, there will be growing intergenerational inequality.
In Spain, older working-age people (55‑64) have experienced faster income growth than young working age people (25‑34). In 1995, the equivalised disposable household income of younger adults was 1.3% higher than that of the older group. This trend reversed in the 2000s, and by 2022, older working-age people had incomes that were 5.6% higher than those of the younger group.
Moreover, Spanish Millennials – those born after the 1980s – have experienced limited income growth throughout their adult lives, partly due to stagnant labour productivity growth in recent decades and the lasting impact of the Global Financial Crisis.
Younger generations will face the economic and societal challenges driven by an ageing population. Therefore, extending working lives in Spain would not only help unlock additional labour resources to support economic growth, but also ease the burden on the young, who are already experiencing stagnating incomes.
The nature of work is changing, offering older workers a chance to stay productive for longer, but these benefits may be offset by a decline in skills as the workforce ages. To address this, there is an urgent need to shift from the current model where only a third of 55‑65 year‑olds participate in training, to one where people learn throughout life.
Participation in training is low in Spain, particularly among older workers. Only 29.3% of workers aged 55‑65 take part in non-formal training over the year, compared to an average of 34.9% across 29 OECD countries (see figure below). 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 14.7.
Spain offers several training programmes for unemployed older people but has relatively few initiatives specifically aimed at promoting training for older people already employed. Firms of all sizes can access credits – Social Security contribution rebates – for training programmes they co‑ordinate, whether delivered in-house or by external providers. Under this scheme, workers over 45 are considered a priority group, and large firms must ensure their participation reflects their share in the workforce. Additionally, workers over 45 are often granted priority access to publicly funded training courses for employed individuals, offered through the Spanish Public Employment Service (SEPE).
Contact
Javier TERRERO (✉ javier.terrero@oecd.org)
Stéphane CARCILLO (✉ stephane.carcillo@oecd.org)
Stefano SCARPETTA (✉ stefano.scarpetta@oecd.org)
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The full book is available in English: OECD (2025), OECD Employment Outlook 2025: Can We Get Through the Demographic Crunch?, OECD Publishing, Paris, https://doi.org/10.1787/194a947b-en.
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