{"id":1640,"date":"2026-01-26T19:29:32","date_gmt":"2026-01-26T16:29:32","guid":{"rendered":"https:\/\/alegria-service.com\/?p=1640"},"modified":"2026-01-27T19:34:29","modified_gmt":"2026-01-27T16:34:29","slug":"spain-labor-market-is-creating-more-and-more-jobs","status":"publish","type":"post","link":"https:\/\/alegria-service.com\/en\/blog\/immigration\/spain-labor-market-is-creating-more-and-more-jobs\/","title":{"rendered":"More and more jobs are being created in the Spanish labor market"},"content":{"rendered":"

The Spanish labor market has seen massive job creation in recent years, allowing for the relatively efficient integration of the hundreds of thousands of immigrants who arrive in the country every year. This has not been achieved in such economically developed countries as Finland or Sweden, where foreigners constantly replenish the army of unemployed.<\/p>\n

Quality of employment and productivity<\/h2>\n

However, in Spain, many of the jobs are unstable, low-productivity and low-quality, and most of them are created in the hospitality, tourism, and trade sectors. On the other hand, if we look at the relative growth performance, under the thick layer of instability, some leading sectors are starting to emerge that have attracted the attention of experts who are studying the situation more closely. At the same time, labor productivity increases, although at a low rate.<\/p>\n

Historically, the behavior of the Spanish economy has been the opposite. During periods of expansion and job creation, productivity declined rapidly (stagnating from 1999 to 2007 and growing slightly from 2014 to 2019) as more labor was brought into the productive mix. When the crisis hit, the labor market destroyed millions of jobs (employment fell faster than economic activity) and productivity \u201cartificially\u201d increased\u2014that is, GDP was generated by fewer people working.<\/p>\n

This was the result of resource allocation, mainly in sectors with very low value added, very labour-intensive, very temporary, precarious and low-skilled employment. Now, although some of these problems still persist, small changes can be seen in the Spanish labor market.<\/p>\n

Context: the 1999\u20132008 cycle and the consequences of the crisis<\/h2>\n

Between 1999 and 2008, Spain experienced an intense growth cycle, driven by its entry into the eurozone and the greater availability of credit (at lower interest rates) around the world. This made home buying easier, supported by legislation favorable to residential property investment, and led to significant employment growth. However, when the real estate bubble burst, along with the global financial bubble, the consequences were catastrophic for the Spanish economy and its labor market, which destroyed jobs more brutally than in neighboring countries.<\/p>\n

New findings: above average growth for Europe and PTF<\/h2>\n

A new report from the Observatory on Productivity and Competitiveness in Spain, published by the BBVA Foundation and the Valencia Institute of Economic Research (IVIE), finds that the significant disruptions in the global economy in recent years have so far had a limited impact on Spain’s development dynamics. Since 2020, the Spanish economy has been growing above the European average, not only due to increases in employment and capital (equipment, machinery, real estate, infrastructure), but also due to improved efficiency in the use of both productive inputs and PTF (total efficiency of production factors).<\/p>\n

These data are also confirmed by a previous study (BBVA Foundation) \u201cProductivity in Spain: technological and entrepreneurial factors\u201d, which already marked the beginning of a long-awaited change in the model of the Spanish economy. This model is based on more stable employment, increased productivity of labor and capital, more efficient use of installed capacity, increased PTF and widespread distribution across most of Spain’s productive structure (sectors, regions and enterprises).<\/p>\n

Sectoral shift after the pandemic<\/h2>\n

CaixaBank Research supports this thesis and notes that the post-pandemic employment recovery in Spain was not only intense in quantitative terms, but also had qualitative features that clearly differed from previous cycles. Between 2019 and the first three quarters of 2025, employment increased by 11.9%, but unlike the growth in 2014-2019, this increase was concentrated in higher value-added sectors. As economists at CaixaBank Research highlight, sectors such as health, professional and scientific activities, and technology have gained greater importance, while traditionally labor-intensive but less productive sectors (trade, hospitality, agriculture) have played a more minor role. This sectoral shift is important because it indicates a more favorable composition of employment for aggregate productivity.<\/p>\n

Education, contracts and real wages<\/h2>\n

Added to this sectoral shift is a very significant improvement in the level education<\/a> busy. The report highlights that between 2019 and 2025, more than 70% of employment growth came from people with a college degree or equivalent, significantly higher than the share seen in the previous cycle. In parallel, employment of people with lower levels of education continues to decline. This trend involves the accumulation of human capital, which by definition contributes to higher average labor productivity, facilitating the adoption of new technologies, more complex processes and more efficient organization.<\/p>\n

Another key element is job security. Spain started from a structurally high level of temporary employment, but there has been a significant adjustment since the 2021 labor reform. According to CaixaBank Research, the temporary employment rate fell from 26.6% on average over 2017-2019 to 15.4% in the first three quarters of 2025, closer to the eurozone average.<\/p>\n

The report notes that this decline was entirely due to all sectors reducing their use of temporary contracts. Greater stability improves productivity by encouraging on-the-job learning, reducing turnover and enabling more effective labor relations. It is true that other analyzes show that contract stability (the share of people employed on permanent or temporary contracts) has improved much more than actual stability (the time these people remain in a job, earning wages and making contributions).<\/p>\n

A more accurate picture is provided by the dynamics of real wages. Taken together, average real wages fell marginally by 0.3% between 2019 and 2025. Employment was more concentrated in high-wage sectors, but in many sectors wages did not offset inflation.<\/p>\n

Immigration, job quality and controversial elements<\/h2>\n

Overall, the data suggests that Spain has created better jobs since 2019, although not without tensions. Higher skills, less transience and a more favorable sectoral composition provide a strong basis for more stable productivity growth than in previous periods of expansion. As CaixaBank Research’s analysis implicitly suggests, the challenge now is not so much about job numbers as it is about ensuring that quality improvements are reflected more clearly in real wages (including new workers on open-ended contracts and those still on temporary contracts) and in the economy’s aggregate productivity.<\/p>\n

As follows from the bank’s report, a key factor in the increase in population and the creation of new jobs was Spain’s liberal position regarding immigration<\/a>. What’s even more interesting, however, is that the quality of employment is also improving, with fewer temporary jobs and more jobs in higher-wage sectors. True, the decline in the share of temporary jobs is largely due to the increase in the number of permanent seasonal workers, which is a controversial phenomenon that does not lead to a clear improvement in the quality of employment.<\/p>\n

The problem with permanent seasonal workers is that they work for several periods of the year, and during downtime their contracts are not terminated. Although this is not a new form in Spanish law and its share has \u201conly\u201d doubled to 5% of employees, the volatility of their actual working hours is even higher than that of temporary workers, calling into question their role.<\/p>\n

Efficiency by sector and investment<\/h2>\n

Although labor productivity has increased since the global financial crisis, structural factors still keep Spain below other EU countries. However, the continued creation of quality jobs should stimulate further productivity improvements. Such a \u201creshaping\u201d could support more robust growth over the medium to long term, provided these patterns of job creation are maintained.<\/p>\n

IVIE believes that employment growth in sectors with high wages and higher productivity has been accompanied by an increase in the allocation of resources to these industries and sectors. The best examples are the forced digitalization and retraining of thousands of workers during the pandemic.<\/p>\n

Since the pandemic, the stagnation of investment efforts at around 20% of GDP has been offset by improved use of accumulated capital and a greater focus of investment on more productive assets – such as software, in-house training, organizational improvements, design or advertising. Over the past four years, the vast majority of sectors of the economy have significantly improved their productive efficiency, but in \u201cnon-market\u201d sectors (including education, health care, social services, real estate and government) productivity has shown little improvement.<\/p>\n

The private sectors showing the largest productivity gains since the start of the pandemic are vehicle manufacturing (with annual PTF growth of about 20%) and hospitality (+13%). In the case of the hospitality industry, as in the US, this may be due to a surge in home delivery orders, which has allowed the sector to increase production without having to increase inputs to the same extent. Also highlighted are the extractive industries (+8.7%), equipment production (+8.4%), transport (+7.8%), and the production of rubber, plastic and other non-metallic products (+6.7%).<\/p>\n

As BBVA Research has repeatedly analyzed, the sectors with the most productivity growth tend to create few jobs (in absolute numbers), while other sectors with significant employment growth are unlikely to increase their productivity or even decrease it. Artistic and creative activities, finance and insurance are showing gains in efficiency but are hardly absorbing jobs. Construction, industry, government, health and education, and information and communications services increase employment but reduce productivity. Only trade, transport and hospitality, and professional, scientific and technical activities combine job creation and significant productivity growth.<\/p>\n

Demographics and integration of immigrants<\/h2>\n

The growth of the Spanish economy is supported by immigration and job creation. Spain is among the countries with the highest demographic growth in the EU, with a population increase of around 4% over the past five years, while Italy and Greece have seen declines.<\/p>\n

The vast majority of immigrants come from South American countries, which is especially noticeable in the examples of Madrid or Barcelona. The Spanish language, as well as cultural and religious similarities, make the integration of Latin American immigrants into Spanish society generally smoother and faster than that of other diasporas. Argentines, Colombians or Cubans hold positions as doctors, nurses, but also work in advanced companies offering engineering or computer services.<\/p>\n

Historically, immigration has been associated with low-skilled jobs in low-value-added and low-wage sectors. However, the migration wave observed in recent years is very different from the one that arrived in the early 2000s. The qualifications of arriving migrants allow them to enter professions related to engineering, healthcare or computer science.<\/p>\n

What 2026 will show: risks and uncertainties<\/h2>\n

As things stand, 2026 will be the key year to see whether the trend towards simultaneous productivity and employment growth will strengthen or whether it will prove to be an illusion. There are risk factors such as the unprecedented international and national political situation (Spain has not adopted a new government budget for almost three years), as well as the possibility of a downturn in markets due to artificial intelligence, which limits access to financing.<\/p>\n

You might be interested in:<\/strong><\/p>\n