The slowdown in economic growth in Spain has affected job creation, and there has been a growth in unemployment over 2001 and early 2002. However, new statistical definitions used in calculating the official unemployment figures may disguise the real situation and suggest a more positive development.
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The slowdown in economic growth in Spain has affected job creation, and there has been a growth in unemployment over 2001 and early 2002. However, new statistical definitions used in calculating the official unemployment figures may disguise the real situation and suggest a more positive development.
Unemployment has started to grow again in Spain in recent months, following a period of job creation and falling unemployment, which began in the mid-1990s, during which - although unemployment was still relatively high - the high levels of temporary employment led to a new concern about employment quality. This period had succeeded the major economic crisis of 1990-4 which had led to an increase in unemployment, following the 1985-90 period in which economic growth had favoured a reduction in unemployment. Table 1 below shows the level of unemployment, as measured by the Survey of the Active Population (Encuesta de la Población Activa, EPA) over 1987-2001.
| Year | No. of unemployed |
| 1987 | 2,936,500 |
| 1988 | 2,899,000 |
| 1989 | 2,555,100 |
| 1990 | 2,438,200 |
| 1991 | 2,388,200 |
| 1992 | 2,686,000 |
| 1993 | 3,396,700 |
| 1994 | 3,762,900 |
| 1995 | 3,537,500 |
| 1996 | 3,535,800 |
| 1997 | 3,364,900 |
| 1998 | 3,070,000 |
| 1999 | 2,550,700 |
| 2000 | 2,345,500 |
| 2001 | 2,192,100 |
Source: Survey of the Active Population.
With the international economy entering recession in 2001, the effects began to be experienced in Spain. Although Spain's economic cycles tend to be out of step with those elsewhere in Europe and of different intensity (with higher growth and deeper recession), the data indicate that its labour market cycles are close to those of the rest of Europe. Thus, as indicated in table 2 below, Spanish unemployment started to rise again during 2001 (ES0201209F), following the start of the economic slowdown which had already begun to be reflected in indicators such as industrial production. In the last quarter of 2001, the number of unemployed rose by 33,900 persons, with the loss of 17,400 jobs (according to the EPA). Registered unemployment as recorded by the National Institute of Employment (Instituto Nacional de Empleo, INEM) started rising in July 2001.
| Quarter | No. of unemployed |
| 1st quarter | 2,267,400 |
| 2nd quarter | 2,192,100 |
| 3rd quarter | 2,179,500 |
| 4th quarter | 2,213,400 |
Source: Survey of the Active Population.
This tendency continued in the first two months of 2002, with an increase of 76,884 in the number of people unemployed in January and of 14,321 in February. In 2001, according to the EPA, the employed population grew by only 2%, compared with 4.7% in 2000. There was also a major slowdown (from 6.2% to 2.4%) in the job creation rate.
The EPA unemployment figures for the first quarter of 2002 were being eagerly awaited in April. The criteria used by EPA in defining unemployment have, controversially, been amended in a more restrictive direction since the beginning of 2002 (ES0202214F). Thus, although unemployment in Spain is rising, the official unemployment rate may fall substantially. It is estimated that by applying the new definition to the last quarter of 2001, for example, the number of unemployed people would be cut by 344,600 and the unemployment rate from 12.8% to 10.3%. The Spanish unemployment rate could thus be close to the European Union average, though the real figures are clearly the worst in the EU. The changes to the statistical definition, which are in line with Eurostat criteria, may favour the standardisation of official figures on labour markets in the EU, but may also lead to some confusion as to the real situation. Whereas the new statistics may show a favourable development, it seems that the real tendency is quite the opposite.
Another paradox in Spanish employment figures is that - though slowing down - the number of contributors to the social security system continues to grow at a higher rate than employment, whether measured according to the EPA or the National Accounts (Contabilidad Nacional, CNTR). This has normally been taken as an indication of a buoyant labour market, but in this case it must be attributed to the large-scale legalisation of immigrant workers, and to a lesser extent to statistical changes. The positive figures for social security contributors thus correspond largely to the legalisation of existing jobs rather than the creation of new jobs.
Eurofound recommends citing this publication in the following way.
Eurofound (2002), Unemployment continues to rise, article.
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