The demographic development in Spain is gaining momentum and leaving clear marks on the labor market. The increase in the employment of older people, in particular, is a phenomenon that attracts attention. In just six years, the number of workers over 64 has more than doubled, reflecting the profound changes in Spanish society.
Spain is getting older, and so is its workforce. The unstoppable aging process, in which the country is immersed and which will accelerate in the coming decades, is increasingly noticeable in employment. A particularly striking statistic illustrates this trend: the number of social security contributors over 64 has doubled in just six years. While there were 216,685 people in May 2019, this number had already risen to 438,801 in the same month this year.
The Transformation of Age Structures in the Spanish Labor Market
This increase within the age group of over 64s is remarkable, especially considering that the total population in this age group has only grown by 12% in the last six years – a significant difference from their participation in the labor market. The increase in the number of older workers is undeniable. While the number of employees over 64 has doubled in six years, the age groups of 60-64-year-olds increased by 43% and 50-59-year-olds by 22%.
The age portrait of Spain’s recent labor boom tells a story of old and young, while the middle age groups seemingly recede into the background. Compared to the last year before the pandemic, there are now 21.4% more people under 30 (600,000 more) and 24.2% more people over 45 (2.1 million more). In contrast, the group of middle-aged workers (from 31 to 44 years) has decreased by 5.2% (400,000 fewer).
Pension Reforms and Demographic Change as Driving Forces
The changes in pension regulations in recent years partly explain this boom. In 2019, the ordinary retirement age was 65 years and eight months, one year less than today. In addition, the pension reform adopted by the government in two phases (2021 and 2023) increased penalties for early retirees while creating economic incentives for those who chose to delay their exit from the labor market.
The other part of this boom is related to the natural aging of the Spanish population, whose largest generation – the baby boomers – is already entering retirement. The goal is to extend the working lives of the population as much as possible to better manage the retirement wave of the baby boomer generation, which will lead to a significant increase in public pension expenditures in the coming decades. However, an aging workforce also brings challenges. On the one hand, there are activities that require strength or involve physical wear and tear, which can be difficult for older workers. On the other hand, workers do not always have the power to decide to extend their working lives.
Self-Employment and Wage Development for Older Workers
Workers over 64 years old form a quite heterogeneous group from a labor law perspective. One of the most striking pieces of data is that 45% of them are self-employed. This is a much higher proportion than in the Spanish economy as a whole, where self-employed individuals make up 16% of the total. A possible hypothesis that could explain this pronounced presence of self-employed individuals is the difficulties of being able to retire in this group, as pensions are generally lower due to lower contributions.
Among employed workers, the group of over 64s has improved their salaries more than any other age group since the year before the pandemic. The latest available data from 2023 shows that the average gross salary for this age group is 30,931 euros, an increase of 24% compared to 2019. In addition, older workers tend to be less employed in more physically demanding sectors (such as manufacturing, transport, or tourism). Conversely, the economic sectors where this age group is most represented are trade (15.6%), health and social services (11.9%), and scientific and technical professions (9.5%).
