Spain approaches the two-year milestone of labor reform backed by the coalition government of PSOE and Unidas Podemos. The year 2023 ends with a clear balance: employment reaches a record high with more than 20.8 million people contributing to Social Security, while unemployment declines to its lowest level since 2007, totaling 2,707,456 registered jobseekers. In a global climate marked by geopolitical uncertainty and slower growth, the outlook for 2024 is uncertain, and analysts question whether employment will follow the 2023 trend of resilience and gradual improvement versus slowdown.
Spain closed 2023 with a new employment record reaching 20.84 million jobs
1. Record employment: women and young workers lift participation
Despite a challenging start, 2023 closes with a 2.7% year-over-year rise in Social Security affiliation, adding 539,740 contributors for a total of 20,836,010 records. The year saw a larger increase than 2022, which added 471,360 members, underscoring sustained momentum. More than half of new jobs in 2023 were held by women, who surpass 9.85 million contributors, roughly 300,000 more than December 2022 and representing 47.3% of all workers. This marks the highest share in the historical series. Youth employment also grew, with Social Security coverage for those under 30 increasing by 10.8% compared to pre-pandemic levels, outpacing average growth by 3.7 percentage points.
2. Unemployment: the lowest level since 2007
As 2023 ended, unemployment declined by 27,375 in December and dropped by 130,197 over the year, reaching 2,707,456 people—the lowest December figure since the onset of the financial crisis in 2007. Around 71% of the unemployed receive some form of assistance. The reductions were seen across sectors: services led the decline with 81,333 fewer unemployed, followed by industry with 17,731 fewer, agriculture with 15,483 fewer, and construction with 13,339 fewer, including a decrease among first-time job seekers by 2,311. The gains favored women, who reduced unemployment by 73,175, outpacing men by 57,022, while women still account for nearly 60% of registered unemployment. Among younger workers, unemployment under 25 fell to 193,965, the lowest figure in the historical series. A government minister highlighted that there has never been a smaller pool of unemployed youth.
Regional variations show improvements in all autonomous communities compared with 2022, though progress was slower in Madrid, Catalonia, and the Basque Country. Relative declines were strongest in the Balearic Islands, Aragon, Galicia, and the Canary Islands, reflecting different regional labor dynamics.
3. 2024 Outlook: a softer growth path
The year 2023 began with a slowdown but delivered positive surprises in spring. Employment growth moderated in the latter part of the year, yet December recorded a notable uptick of 29,937, far above December 2022’s 12,640. Official voices suggest that 2024 will feature slower but steadier growth, with an emphasis on the quality of employment and stability. This perspective comes from the Social Security Department, which notes that a resilient but carefully measured pace is expected to characterize the year ahead.
4. Historical minimum in temporary employment rates
Labor reform effects are visible in greater job security. The latest figures show more than 3.1 million Social Security affiliates under permanent contracts, a landmark tied to the reform’s aims. December marks a peak in permanent contracts at 86%, the highest in history, while temporary contracts hover around 14%. The under-30 cohort saw the sharpest drop in temporary arrangements, falling by 31 points from the pre-reform level. Throughout 2023, permanent, full-time contracts rose by an average of 5.5%, part-time contracts by 5.2%, and discontinuous contracts by 3.7%.
The reform’s impact also appears in the steady expansion of permanent full-time employment, alongside more stable part-time and discontinuous arrangements, indicating a structural shift toward durable employment arrangements across the year.
Source notes and context are attributed to official labor market data and ministry reports.