Spanish Labor Market and Social Security Evolution

The Pension System and Toledo Pact Challenges

Under the Toledo Pact agreements, a variety of approved propositions of law will be launched, including referrals and other government actions regarding Social Security. The latter fits among measures highlighting the Social Security reform agreed upon with the main social and economic partners, the minimum pension increases, and the growth of social protection spending in the Reserve Fund to 42,000 million euros in 2007. Efforts continue regarding rights for the advancement of discriminated groups and the integration of Social Security regimes.

Spanish Labor Market Stages (1973-2009)

• 1973-1984: This period was characterized by greater regulatory intervention. The Workers' Statute was approved in 1980, boosting the role of unions legalized recently, replacing interventionist salary norms. A deeply held trait was the introduction of generous benefits for the unemployed.
• 1984-1992: Reforms were driven to facilitate job creation by promoting temporary contracting. The increase in unemployment during the economic crisis raised the need to reform and eliminate existing restrictions. The 1984 reform focused on introducing new types of contracts to provide both access to employment and agile separation.
• Since 1992: A phase of progressive flexibility and the elimination of labor rigidities began. Measures at this stage have had a more global influence on various aspects of labor regulations, such as hiring and unemployment benefits.

Immigration Shock Causes (1995-2007)

• 1995-2000: The material basis of the immigration shock was the practical stagnation and aging of the potentially active population. This was mostly driven by a strong asset growth rate in Spain and a sharp decline in the unemployment rate.
• 2001-2005: The stagnation of the aging active population became more pronounced. From 2003, the contribution of immigration became essential, accounting for over 50% of new jobs.