Unemployment in Spain Essay Example

1.1 Background of the Study

Spain has an estimated population of 47,526,000 in 2021. (Britannica, 2021)  Its unemployment rate is the highest in the European Union (EU) for 2021, sitting at 14.1% for the month of November 2021, just ahead of Greece. 

Spain also has the second-highest youth unemployment rate behind Greece at 29.2%. Youth unemployment is still a problem in Spain but is becoming less and less concerning every year. It is a positive sign that it will keep decreasing through the years. This is a relief for Spain’s youth as it has been a problem since the financial crisis of 2008.

Spain is located in extreme southwestern Europe. It occupies most of the 

Iberian peninsula, occupying about 85% of it. The country shares the peninsula with Portugal. The capital of Spain is Madrid and the country's head of state is King Felipe VI. Its form of government is a constitutional monarchy with two legislative houses. (Britannica, 2021)

The Spanish economy first showed signs of exhaustion in 2006. The international economic crisis, which started in 2007 and got worst in 2008, ramped up at the end of the expansive cycle and triggered an adjustment. The 2008 economic crisis highlighted Spain’s structural problems within the country’s economy. Spain’s growth model heavily depended on domestic demand, more specifically on construction and property development activities. This became known to be an absolute failure for Spain and its economy. In the real estate sector, there was a major bubble that included growth in demand and prices and supply. When the crisis hit Spain, the bubble popped, and it affected Spain’s economy. Credit granting to construction and property development activities caused exposure of the banking industry and to those sectors. The publicity was the means of transmission of the housing crisis to the banking sector, whose business is still constrained because of the inadequate risk policy and the deficits of supervision. (Carballo-Cruz, 2011)

1.2 Statement of the problem

This study aims to analyze the cause of unemployment in Spain from 2000-present. Specifically, this study aims to answer the following questions:

What is the trend of the unemployment rate in Spain from 2000-present?

What are the causes of the high unemployment rate in Spain?

What are the economical impacts of the high unemployment rate in Spain?

What are the programs that the government implements to reduce the increasing unemployment rate in Spain?

1.3 Significance of the study

The significance of the study is to spread awareness to the readers and to help them understand what causes high unemployment rates and know how it impacts a country like Spain. This study is to show what are the impacts of the high unemployment rate, and what are the causes of the high unemployment rate in Spain. It also impacts a country’s economy and reduces its Gross Domestic Product (GDP). A high GDP is important because if a country has a high GDP, more workers will be hired, and a rise in employment will follow. And a low GDP means more people are going to get let go by companies for profits. Readers will also understand what recession is and how it impacts an economy. 

Readers

Future researchers

Government officials

1.4 Scope and delimitation

The scope of the study includes the trend of the unemployment rate in Spain from the 2000s up to the present and how it has been either rising or falling. The study also includes what programs or reforms the government are implementing or has implemented to reduce the increasing unemployment rate in Spain. It includes the different causes and the economic impacts of the high unemployment rate in Spain. This study will also include possible solutions for reducing the unemployment rate in Spain. The study will also briefly discuss how the COVID-19 pandemic has impacted the unemployment rate in Spain. 

The delimitation of the study is all about the cause of unemployment in Spain and the impacts it has on the economy of Spain. The main focus of this study is the unemployment rate in Spain. This study will only be focused on the years 2000 up to the present. Years before 2000 that were mentioned in the study, will not be further discussed. Any country that was mentioned in the study, except Spain, will not be further discussed in the study. The cause of unemployment and the impacts it has on the economy, including the trend of unemployment and the programs the government implements will be discussed properly; since they are the main topics of the study.

1.5 Definition of terms

Unemployment (noun) - the state of being unemployed 

Unemployment rate - the percentage of unemployed individuals in an economy among individuals currently in the labor force

Economy (noun) - is the system according to which the money, industry, and trade of a country or region are organized

Gross Domestic Product (GDP) - the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health

European Union (EU) - an international organization comprising 27 European countries and governing common economic, social, and security policies

Crisis (noun) - a stage in a sequence of events at which the trend of all future events, especially for better or for worse

Financial crisis - asset prices see a steep decline in value, businesses and consumers are unable to pay their debts, and financial institutions experience liquidity shortages.