Spain's shrinking population

Víctor Torre. Professor. IE Business School/IE Law School

29 May 2013

For the first time in history, Spain’s population is going down and is set to keep falling, which means that the government has to act now to adopt long-term policies to offset its negative effects.

The April 23 issue of El País newspaper examined the census figures published by Spain’s National Institute of Statistics (INE) on January 1, 2013.  The most interesting news was that for the first time since 1998, when these figures began to be published on a regular basis, Spain’s population has shrunk. In one year Spain has lost 205,788 people, due largely to the amount of people who have signed off the registers of Spain’s town and city halls.

This fact is even more important when placed in perspective. In effect, according to the official figures published by INE, Spain’s population rose without exception in the years between 1900 and 1991. Hence it could be said that this drop in population is a unique occurrence in Spain’s recent history. 

We should, however, get used to a shrinking population. According to data published by INE last November, Spain’s population will continue to fall over the next few decades. At first, it will be due people leaving the country,  as occurred last year and the previous year, as Spain sees a shift in trends from immigration to emigration.  Then, as from 2018, it will be due to negative natural growth levels (fewer births than deaths).  Hence INE forecasts that by 2022 Spain’s population will have fallen from the current level of 47.1 million to 45 million).

Moreover, the resulting smaller population will be older.  If the percentage of the population that is older than 65 years old currently stands at 17.7 %, in the year 2022 it will be 21 %.
The consequences of a population that is ageing as it shrinks are well known. Less economic growth, greater difficulties in gathering tax, increased demand for public services, serious difficulties in sustaining the future of the pension systems without deep reforms, fewer facilities for innovation, greater social resistance to change, etc.

The Spanish government faces pressing challenges, such as the economic crisis, the dissatisfaction of a large part of the Spanish population with its political system, or a revision of the state of autonomies. These are formidable tasks that require short-term measures.  However, the urgency of some problems should not stop it from addressing other, equally important issues. And a shrinking population is an important problem.

Perhaps the government should adopt a national strategy that combines the study of actions in the field of social security (particularly in pension reform, facilities that enable workers to have children, and allowances for dependent children), tax (reviewing the tax treatment for families with children and tax incentives for mothers), labor (maternity and paternity  leave, unpaid leave to look after children), social action (large families, childcare), the fight against youth unemployment (which leads to emigration among the young), education and professional training (which brings opportunities to set up businesses or get a job in Spain), and even immigration (attracting young immigrants with good qualifications).

Bismark was certainly right when he said that “the politician thinks about the next election, the statistician thinks about the next generation.”
 

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