The impact of population ageing on the labour force participation rate in Spain

Pilar Cuadrado, José Manuel Montero, Alejandro Fernandez Cerezo and Francisco José Rodríguez
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Pilar Cuadrado: Banco de España
José Manuel Montero: Banco de España
Francisco José Rodríguez: Banco de España

Economic Bulletin, 2023, issue 2023/Q3, No 12

Abstract: Rationale Population ageing is one of the greatest structural challenges facing the Spanish economy. Foremost among its multiple effects is its contractionary impact on labour supply, which will foreseeably have major implications on both the functioning of the labour market and the potential growth or sustainability of public finances. Takeaways •Population ageing over the past decade has had an estimated negative impact of around 3.4 percentage points (pp) on Spain’s participation rate in 2022. This impact has been uneven by regions, with a sharper fall in the Cantabrian regions (Asturias, Cantabria and the Basque Country). •According to the latest National Statistics Institute’s population projections, the participation rate is set to drop a further 2.8 pp by 2030 owing to the continuing ageing process. Excluding the support of net immigration flows, the drop would be 1.6 pp greater. •In addition, the impact of ageing may deepen regional divergences, since the regions that have an older population and lower GDP per capita may be expected to experience the sharpest falls in the participation rate.

Keywords: Labour force; participation rate; demographic ageing; Spanish regions (search for similar items in EconPapers)
JEL-codes: E24 J21 R11 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:bde:journl:y:2023:i:03:n:12

DOI: 10.53479/33513

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