Spain’s central bank and the Fundación de las Cajas de Ahorro (Funcas) warn that the progressive ageing of the active population could affect the labour market and thus economic growth. They argue that the arrival of migrants could help alleviate this situation.
In statements to the Spanish news service Servimedia, Funcas director Raymond Torres explained that the evolution of the age of workers could reinforce the lack of certain profiles. This, in turn, could have an effect on economic growth.
Torres stressed that this is “a crucial issue, because if we look at the data, we see that young people between 15 and 24 years old, who will enter the labour market, work three times less than workers between 55 and 64 years old”. And that is the group that will leave the labour market in the coming years. This contrasts with 2007, when ‘the situation was balanced’ between the labour force entering and leaving the labour market, this expert said.
In view of this situation, Torres pointed out that immigration will therefore have a positive impact. Although he warned that “the shortage of talent in certain sectors is not only in Spain” so “we may see international competition for talent” with other countries.
Competition for talent
For this reason, facing ‘a world where we are going to compete for the same talent’, Torres stressed that ‘other solutions have to be found ‘, besides immigration. He cited as an example the need to ‘mobilise the entire active population’. According to him, ‘the active population is decreasing’ but ‘not everyone is working’, as there are three million unemployed and inactive people.
‘It is a question of improving the effectiveness of employment policies through training, in order to meet the demands of the labour market,’ said Torres, who stressed the importance of ‘including in the labour market everyone who wants to’, with an emphasis on women, young people and older workers.
For the latter group, the Funcas chief called for ‘improving’ the combination of retirement and work, as current regulations in Spain could be ‘further improved’.
He also stressed the need for Spain to make progress on productivity, as more resources, such as healthcare, need to be funded for an ageing population.
Vision of the Bank of Spain
The Bank of Spain stressed in its latest annual report that the ageing population and the evolution of the number of hours worked per worker could play a ‘very important’ role in the evolution of labour supply and per capita income in the future.
‘Ageing would be even more pronounced were it not for the fact that net migration flows into our country are expected to be positive and relatively high in the coming years. Therefore, it is necessary to constantly check whether the new migration policy is capable of effectively alleviating the mismatches occurring in the labour market,’ the Bank of Spain argues.
An additional aspect that may affect labour supply is the health of the Spanish population and healthcare developments. Given its importance, priority should be given to assessing the efficiency of public spending on healthcare, the Bank of Spain said.