Employment and unemployment flows in Spain

José has put together an instalment of what is intended to be a continuing series on the Spanish labour force.

This simple chart pretty well tells you everything you need to know about how the Spanish labour market has been decimated since 2007. Starting from the left, we see an economic recession that has fed upon workers of both sexes from age 16 to 34 years. If anything, that the peak employment age is now five years older than it was seven years ago makes it seem like the 30 to 34 year-olds of 2007 survived relatively unscathed. But everybody younger than that found themselves permanently unemployed or relegated to a world of intermittent temporary work opportunities.

We've pointed it out before in another context, but very interesting is the evolution of female employment over the age of 40. There are 510,000 more of them working now than there were in 2007. Male job losses, for their part, begin to even out at 40 years and become negligible by age 50. This is, of course, testimony to the power of the finiquito - the exorbitant legally regulated Spanish severance pay. This lot is just too expensive to fire.

Here's a series of employment flow graphs by age group.

The curiosity of the series for 'youth' unemployment is that flows are almost consistently positive since the third quarter of 2009. But what we think is evident is that there is a great deal of churn distributed within a precipitous decline in the labour force. These now hold 4.5 percent of all jobs against 9.5 before the collapse of the real estate bubble.

The story for people of prime working age, 25 to 44, is quite different. Net flows were negative, or very slightly positive, from the beginning of 2008 right through 2013. The change to positive at that point has been notable and, in fact, anticipated the change in tone of the Spanish economy in general by a full year. This group has also seen a lowering of their relative weight, dropping from 58 percent at the peak to 52 now.

For age group 45 to 54 we see a pattern of net outflows in the context of mildly, but regularly, increasing inflows. This probably reflects the previously noted pattern of increased female employment. But they also show the aging of the Spanish work force. They hold 26.5 percent of all jobs versus 21 in 2008.

The large gap between in- and out-flows is to be expected in the oldest group due to the effect of retirement. At this point, workers leave and do not return. Beyond that, nothing has changed for them over the course of the recession - except that their share of total employment has risen from 11 to 15 percent.

José Domingo Rosello, with contributions from Charles Butler and Javier García Echegaray.

Other posts in this series:

http://ibexsalad2.blogspot.com.es/2014/10/third-quarter-spanish-unemployment-part1.html