Despite Europe’s first war in two decades, the worst inflation in four decades, and lingering pandemic effects, Spain closed 2022 with a strong employment record. A total of 20.29 million workers were registered with Social Security, the highest figure on record. Yet the country’s labor market began 2022 with momentum that could not be sustained into the year’s final stretch, resembling a long-distance runner who had broken several records over nearly two years since the pandemic began in March 2020.
As 2023 approaches with uncertainty about how employment will unfold, Spain faces the enduring challenge of reducing unemployment, one of the highest rates in Europe. About 2.8 million people want to work but cannot find a job. This is the lowest level since 2007, though still high relative to other European economies. Despite recent volatility, the year ended on a positive note, with unemployment decreasing by 268,252 people across the year.
December capped a month with mixed signals, registering one of the weakest year-end performances in the past decade. Social Security reported a positive balance of 12,640 more jobs, a level not seen since December 2012 amid the severity of the great recession. While around 90,000 jobs vanished then, current data remain solid and encouraging.
2022 also marked a turning point in Spain’s labor market due to a reform that reshaped hiring practices. The reform began to show its impact as the total number of employed people rose by 471,360 compared with the previous year, with a notable shift in job quality. The year closed with 11.2 million fixed-term contracts signed in Spain, a figure far lower than before the reform, while nearly five million people entered permanent contracts, bringing the total to seven million. From a European perspective, these are striking numbers that signal a decisive shift in Spain’s employment trends after decades of instability.
The reform translated temporary hires into more stable arrangements, with a surge of 964 percent in fixed-term and other non-standard contracts from one year to the next. These figures help explain some of the shifts in Spain’s labor dynamics. Analysts note that younger workers benefited particularly from the restrictions on temporary hiring, and by year-end 2022, about three out of four young people held a permanent contract, up from roughly half before the reform took effect.
Unemployment by gender reveals a persistent gap that remained visible in 2022. On the whole, more than half a million more women than men were unemployed, despite women accounting for a larger share of the labor force. Of the 2.8 million unemployed, 1.14 million were men and 1.69 million were women. While unemployment benefits gradually declined for both groups, men tended to re-enter the labor market more quickly, with a 10.5 percent reduction last year versus a 7.3 percent decrease for women. By age, the number of unemployed individuals under 25 fell below 200,000 for the first time at year-end.
These shifts reflect a year of transition for Spain’s job market. The combination of higher labor force participation, reform-driven stability, and targeted progress among younger workers contributed to a healthier employment backdrop by the close of 2022, even as overall unemployment remained stubbornly high compared with the rest of Europe. Data from INE and social security authorities indicate a foundation for ongoing reform benefits and a cautiously optimistic outlook for 2023. Attribution: Spain’s National Statistics Institute and social security records.