The average age of wage earners has grown since 2000 in four years to stand at 43 and a half. The rest of the employees (those who do it on their own) have grown even more: 6.5 years, up to 48.
The causes of this aging of the population are the fall in the birth rate and the increase in longevity. The recomposition by age of the population will have effects not only on the size of the labor force or the evolution of productivity, but also on the demand for goods and services or on the priorities in public spending of governments, reflects a report by Funcas posted today.
The study warns of the rapid aging of the working population in Spain. Aging is especially intense among non-salaried workers, men, salaried workers in the public sector, employees of small companies and autonomous communities in the north-western part of the peninsula.
To combat this phenomenon, the paper proposes two ways. The first is with “the extension of working life” through the delay of the legal retirement age. The second track is “increasing the employment rates of workers near retirement age.”
With respect to the profiles of labor income by age, a slowdown in income is observed starting at 45 years of age and a sharp drop after 60 years of age, which suggests a sharp decline in productivity in these age groups.
If between 2002 and 2022 the employed population increased by around 18%, the employed population aged 50 and over more than doubled, while the employed population aged 16 to 29 fell by half. This phenomenon, which complicates the generational replacement of workers in all segments of the labor market, affects the aggregate growth of productivity, the main engine of long-term economic growth. In order to slow down and reverse this aging process and, therefore, avoid the potential effect on the productive structure, immigration and birth rates are key, according to Funcas experts.
The report studies the evolution of the birth rate in Spain, one of the lowest in the OECD, caused, among other reasons, by labor instability, which derives from the high incidence of temporary contracts, and high unemployment in Spain.
In addition, the low labor flexibility and, specifically, the high incidence of split shifts, discourages birth among women with a higher opportunity cost of leaving the labor market, as is the case of those with university studies. According to the available evidence, the measures with the greatest potential to increase birth rates would be those that facilitate the reconciliation of work and family life. In particular, those that reduce the cost of mothers’ labor participation, such as financing daycare centers or direct aid for working mothers, as well as those that reduce the incidence of split shifts, such as explicit restrictions to the use of this type of day. Of course, the adoption of other measures that contribute to reducing the instability of labor relations would also have a positive impact on fertility.
