Young people in Spain face an economic outlook shaped by early career instability, high fees, and a demographic shift that weighs on their earning potential. While there are differences within the group, those with higher education tend to enjoy better living standards and brighter prospects. This pattern aligns with findings from a key study by the BBVA Foundation and the Valencian Institute for Economic Research (IVIE), titled The present and future of Spanish youth. A socioeconomic perspective, which examines the current conditions and future risks for Spain’s youth, including those in Valencia.
The study shows that youth in Spain experience uneven conditions, with a sizable portion gaining access to social media and digital platforms, yet facing a labor market marked by difficulties. Within the unemployed population, young people carry a disproportionately large share compared with their representation in the workforce. This insecurity helps explain why individuals aged 16 to 29 who have become financially independent or breadwinners often earn about 15 percent less than the national average, roughly €16,000, and those living in poverty can see incomes fall by as much as 40 percent, around €11,000. Education plays a critical role, with significant differences tied to socioeconomic origin and level of schooling. About half of youths in this age group report financial strain, a rate noticeably higher than the national average.
economic cycle
The IVIE-led report, directed by Francisco Pérez, points out that younger workers are more susceptible to the cyclical swings of the economy and that the overall quality of their employment tends to lag behind that of other groups. In concrete terms, 25.4 percent hold part-time contracts, a share well above the general population, and temporary employment sits at about twice the national average. Wages for young workers run roughly 35 percent below the average, and income growth tends to be slower across their working lives. Some early cohorts reach an income base comparable to the average only after age 27, whereas many currently around age 34 have not yet reached that level.
Seen in context, this is a challenging horizon. The prospect of retirement among this cohort is not encouraging. The weaker employment histories—driven by persistent job search hurdles and slower wage growth—carry forward into retirement. In Spain’s contributory system, the same factors that support a steady working life also shape a retirement with a higher likelihood of struggle. When a young person’s working life is shorter, the pension level is less likely to sustain the previous standard of living.
Pension
Taking these dynamics into account, retirement sustainability becomes a critical issue. If retirement ages do not shift upward, planned reforms aimed at securing future benefits could result in pensions for today’s youths being lower than the pensions of current retirees relative to their final salaries. It is essential to remember that reducing the impact of youth demographic weight on public policies means addressing participation and workforce issues early, rather than letting them fade into the background when compared with larger demographic groups. This insight remains relevant for nations like Canada and the United States, where youth labor market challenges echo in long-term retirement and social security prospects.