The aging of the population is one of the challenges that the Spanish economy will have to face. It supposes an added difficulty for the sustainability of public finances, mainly pensions, more with the entry into retirement of the baby boom generation, more and better paid than previous generations. But, it also implies changes in the labor market, with a more restrictive offer and that forces to contemplate the compensation that the arrival of foreign population supposes.
In this field, the analysis published today by the Bank of Spain shows how the labor activity rate in Spain has fallen 3.4 percentage points in the last decade, specifically between 2012 and 2020, a reduction that would have been much greater without the buffer effect of immigration.
The aging of the population has a clear impact on the activity rate, the percentage of the economically active population out of the total, especially since labor participation is much lower among people over 55 years of age.
Thus, if Spain had maintained the same population structure by age as in 2012, the activity rate would have reached 62.1% in 2022, when in reality it has remained at 58.7%. It is the cited difference of 3.4 percentage points, which would have meant 790,000 more potential workers. . A drop that would have been greater without immigration, the million foreign people over 16 years of age who arrived in these ten years, with a younger average age and higher rates of labor participation. Specifically, it would have mitigated the fall by around 0.8 percentage points.
The Bank of Spain article also shows how aging has a very heterogeneous impact by region, with a more intense drop in Asturias, Cantabria and the Basque Country, due to the higher percentages of the population over 65 in these autonomous communities, and in change, more moderate in the Balearic Islands, Castilla La Mancha and Extremadura. In addition, it also reflects how the cushioning effect of immigration has been especially noticeable where there is more entry of migrants in relation to the total population, as is the case of Madrid, Catalonia and the Balearic Islands.
On the other hand, the report also makes the same exercise looking to the future, to the impact of aging from now until 2030. The result is that 2.8 percentage points will be lost and that, without the mitigating impact of migration, the fall it would still be 1.6 points higher.
