Spain Ends 2023 with a Strong Jobs Surge Driven by Immigrants and a Broadening Workforce
Spain closed 2023 with a substantial push in employment, corroborated by the LFS (Labor Force Survey) released on Friday and aligned with earlier monthly membership trends. The year saw a robust rise in employment, ranking among the fastest growth spells in recent history. Unemployment dipped, yet the gains in the labor force tempered the pace of unemployment’s fall, illustrating a broad strengthening of the labor market across the year.
Foreign-born workers played a pivotal role in this dynamic, with women also contributing a meaningful share to the year’s job gains. The big question now is whether 2024 will sustain or accelerate the momentum seen in 2023.
The unemployment rate finished 2023 at 11.7%, the lowest in 16 years
1. Jobs at a record high: immigrants and a strengthened labor pool push recruitment forward
If 2023 ended as a powerhouse year for the labor market, it was also a period where foreign-born workers accounted for a substantial portion of new vacancies. Four in ten newly created roles were filled by immigrants, underscoring the critical contribution of international talent to Spain’s job landscape.
Employment continued to expand and the active population grew as expectations for further hiring remained solid throughout the year. Spain finished 2023 with 783,000 more employed people than in 2022, a record gain that pushed total active workers to 21.2 million in the fourth quarter. Authorities note a deceleration toward year-end, yet the overarching trend remained positive. Self-employment rose at a pace close to that of employee jobs, signaling resilience in the dual structure of Spain’s labor market.
2. Unemployment: the lowest rate since 2007
This vigorous job creation enabled Spain to close 2023 with the lowest unemployment rate in 16 years. At 11.7%, the national figure remains well above the European average of 5.9%, highlighting regional gaps within the EU. The year also saw a reduction in households with all members unemployed, though more than 115,000 households still faced unemployment nationally. The total number of unemployed hovered around 2.8 million, down roughly 193,000 from the previous year, drawing Spain toward the symbolic sub-3 million mark for the first time in 16 years amid ongoing structural challenges.
3. More hours worked, with a mix of gains and constraints
Economic activity reflected a larger workforce and higher total hours, surpassing pre-pandemic levels. Total hours worked rose by 3.3% in the year, outpacing GDP growth and underscoring a sense of momentum in the economy. Cumulative hours through the third quarter rose by 1.8% year over year, signaling improving labor utilization. When compared to the pandemic period, total hours are up about 1.7%.
While sectors like manufacturing and trade have not fully returned to pre-crisis volumes, overall hours worked show meaningful progress. The typical weekly hours dipped slightly, reflecting a combination of higher employment and more part-time arrangements. The average workweek hovers around 31.7 hours, a touch below the pre-COVID level of 33.8 hours. Gender gaps in the labor market persist in certain contexts, underscoring ongoing policy and societal challenges that require continued attention (INE data).
4. Greater stability in hiring
Labor reforms produced clearer hiring patterns, with more permanent contracts and steadying recruitment. The number of Social Security affiliates surpassed 3.1 million, and permanent contracts reached 86% in December, a historic high, while temporary employment stayed at a record low of 14%. Among workers under 30, the temporary rate fell sharply, from 53% to 22% since reforms began, illustrating the reform’s impact on younger workers. In the private sector, the second year of the new labor framework closed 2023 with a temporary employment rate of 13.2%, another historic low. Before reforms, temporary contracts accounted for around 32% of total employment, showing how policy changes reshaped the labor market. Yet there remains recognition that young workers still face challenges, with nearly four in ten under-25s on temporary contracts, reflecting both opportunity and vulnerability as the economy evolves.