What I found interesting is the list of EU countries by home ownership versus tenancy. The wealthier the country, Norway excepted, the lower the ownership percentage. I have some speculative thoughts on why, but expect this is worthy of deeper analysis. On the one hand, the tendency you mention, to stay in the parental home longer due to economics, is probably significant. I also hypothesise, however, that there may be a relationship with the high cost of ownership in wealthier economies. And, I wonder, is there a relationship with the growing tendency toward a rentier society in these wealthier economies?
I’m trying to understand Spain better these days. Recent events in the US have made many of us more aware than ever of a wider world - a good thing I’d say. Thanks Brendan. Useful info I might not otherwise find on my own.
Excellent as always Brendan! I've never really looked into Spain's very high youth unemployment stats but I asked "Claude" and the result was interesting. (Hope you don't mind me posting this; if it's too long, please delete.)
Spain has had among the highest youth unemployment rates in the developed world for decades—reaching a peak of 55.5% in December 2013 and hitting a low of 17.9% in December 2006. Currently, it stands around 25%, down from historical highs but still roughly double the EU average. This persistently high rate stems from a combination of deep structural factors and economic vulnerabilities.
The Dual Labour Market
The most fundamental cause is Spain's "dual labour market"—one of the most extreme cases in the developed world, where temporary workers have few rights and are easy to fire, while permanent workers have very high dismissal protection. This system emerged from a 1984 reform that liberalized temporary contracts while keeping stringent protections for permanent workers. By 1992, more than 30% of all workers were on temporary contracts.
The consequences for young workers are severe: younger, unskilled, or semi-skilled workers disproportionately bear the brunt of unemployment because they're most likely to be hired on temporary contracts in seasonal sectors like tourism, construction, and hospitality. In the pre-crisis boom period, roughly 80% of workers aged 16-19 had temporary contracts. When downturns hit, these workers are the first to be let go.
Only around 6% of temporary contracts were historically converted to permanent positions, trapping young workers in a cycle of precarious employment. This system creates perverse incentives: temporary workers receive less firm-sponsored training (23% versus 40% for permanent employees), reducing their productivity growth and career advancement.
The Collective Bargaining System
Spain's industrial relations framework, which dates back to the Franco regime, conducts collective bargaining mostly at the industry or province level rather than the firm level, with agreements having the force of law. This leaves little room for individual companies—especially smaller ones—to adjust wages to their productivity or respond to economic shocks.
Educational Deficiencies and Skills Mismatch
Spain has historically suffered from very high school dropout rates—around 30.6% between 2005-2010, among the highest in the EU. This creates a significant mismatch between the skills young people have and what employers need. There has been a considerable skill mismatch in the labour force, with the long-term unemployed representing almost 40% of total unemployment.
Economic Structure
Spain's economy is heavily driven by smaller firms that often struggle with capital and talent issues, resulting in lower productivity despite longer working hours compared to the European average.
The economy is also heavily dependent on sectors with inherently seasonal employment patterns. Before the 2008 financial crisis, construction alone represented around 12% of employment (about 2.5 million workers), driven by a real estate bubble. When that collapsed, the sector shrank dramatically, disproportionately affecting young workers.
Sensitivity to Economic Shocks
The response of unemployment to economic conditions in Spain has historically been among the highest in advanced economies, pushing unemployment above 25% during the euro area crisis. Young people absorb a disproportionate share of these job losses because of their concentration in temporary work.
Recent Reforms and Their Limits
Spain's 2021 labour reform attempted to address the dual market by restricting temporary contracts and promoting more stable arrangements. The temporary employment rate has fallen from an average of 29.7% in 2014-2019 to 12.7% in 2024.
However, Spain still has the highest structural unemployment rate in the EU (11% in 2022). Moreover, since the reform, temporary employment has become more concentrated among the most disadvantaged young people, who have also seen an increase in involuntary part-time work—suggesting that while the formal nature of precarious employment is changing, underlying labour market segmentation persists.
In essence, Spain's youth unemployment problem reflects decades of institutional choices that prioritized insider protection over labour market flexibility, combined with an economic structure vulnerable to boom-bust cycles and educational systems that haven't adequately prepared young people for available jobs.
Impresionante que España no tira mucha comida cuando se compara con la UE. Vivía en Dinamarca unos meses y hay mucha charla de revalorizar la comida pero talk is cheap, supongo.
What I found interesting is the list of EU countries by home ownership versus tenancy. The wealthier the country, Norway excepted, the lower the ownership percentage. I have some speculative thoughts on why, but expect this is worthy of deeper analysis. On the one hand, the tendency you mention, to stay in the parental home longer due to economics, is probably significant. I also hypothesise, however, that there may be a relationship with the high cost of ownership in wealthier economies. And, I wonder, is there a relationship with the growing tendency toward a rentier society in these wealthier economies?
Anyway, good collection. Thank you.
I’m trying to understand Spain better these days. Recent events in the US have made many of us more aware than ever of a wider world - a good thing I’d say. Thanks Brendan. Useful info I might not otherwise find on my own.
Happy to help Nik. Thanks for reading.
Excellent as always Brendan! I've never really looked into Spain's very high youth unemployment stats but I asked "Claude" and the result was interesting. (Hope you don't mind me posting this; if it's too long, please delete.)
Spain has had among the highest youth unemployment rates in the developed world for decades—reaching a peak of 55.5% in December 2013 and hitting a low of 17.9% in December 2006. Currently, it stands around 25%, down from historical highs but still roughly double the EU average. This persistently high rate stems from a combination of deep structural factors and economic vulnerabilities.
The Dual Labour Market
The most fundamental cause is Spain's "dual labour market"—one of the most extreme cases in the developed world, where temporary workers have few rights and are easy to fire, while permanent workers have very high dismissal protection. This system emerged from a 1984 reform that liberalized temporary contracts while keeping stringent protections for permanent workers. By 1992, more than 30% of all workers were on temporary contracts.
The consequences for young workers are severe: younger, unskilled, or semi-skilled workers disproportionately bear the brunt of unemployment because they're most likely to be hired on temporary contracts in seasonal sectors like tourism, construction, and hospitality. In the pre-crisis boom period, roughly 80% of workers aged 16-19 had temporary contracts. When downturns hit, these workers are the first to be let go.
Only around 6% of temporary contracts were historically converted to permanent positions, trapping young workers in a cycle of precarious employment. This system creates perverse incentives: temporary workers receive less firm-sponsored training (23% versus 40% for permanent employees), reducing their productivity growth and career advancement.
The Collective Bargaining System
Spain's industrial relations framework, which dates back to the Franco regime, conducts collective bargaining mostly at the industry or province level rather than the firm level, with agreements having the force of law. This leaves little room for individual companies—especially smaller ones—to adjust wages to their productivity or respond to economic shocks.
Educational Deficiencies and Skills Mismatch
Spain has historically suffered from very high school dropout rates—around 30.6% between 2005-2010, among the highest in the EU. This creates a significant mismatch between the skills young people have and what employers need. There has been a considerable skill mismatch in the labour force, with the long-term unemployed representing almost 40% of total unemployment.
Economic Structure
Spain's economy is heavily driven by smaller firms that often struggle with capital and talent issues, resulting in lower productivity despite longer working hours compared to the European average.
The economy is also heavily dependent on sectors with inherently seasonal employment patterns. Before the 2008 financial crisis, construction alone represented around 12% of employment (about 2.5 million workers), driven by a real estate bubble. When that collapsed, the sector shrank dramatically, disproportionately affecting young workers.
Sensitivity to Economic Shocks
The response of unemployment to economic conditions in Spain has historically been among the highest in advanced economies, pushing unemployment above 25% during the euro area crisis. Young people absorb a disproportionate share of these job losses because of their concentration in temporary work.
Recent Reforms and Their Limits
Spain's 2021 labour reform attempted to address the dual market by restricting temporary contracts and promoting more stable arrangements. The temporary employment rate has fallen from an average of 29.7% in 2014-2019 to 12.7% in 2024.
However, Spain still has the highest structural unemployment rate in the EU (11% in 2022). Moreover, since the reform, temporary employment has become more concentrated among the most disadvantaged young people, who have also seen an increase in involuntary part-time work—suggesting that while the formal nature of precarious employment is changing, underlying labour market segmentation persists.
In essence, Spain's youth unemployment problem reflects decades of institutional choices that prioritized insider protection over labour market flexibility, combined with an economic structure vulnerable to boom-bust cycles and educational systems that haven't adequately prepared young people for available jobs.
Thanks for sharing this DS, some interesting takeaways there - a very complex market with lots of nuances indeed.
Impresionante que España no tira mucha comida cuando se compara con la UE. Vivía en Dinamarca unos meses y hay mucha charla de revalorizar la comida pero talk is cheap, supongo.
Hope Feb is a bit more sunny for you!
Thanks for reading Bob, Feliz Feb to you too🙌🏻