In view of the low birth rate, the aging of the population and the limited effect of the Government's measures, the Bank of Spain can only think of one solution to support pensions and avoid imbalances in the labor market: triple the expected arrival of immigrants for the next 30 years.
According to the institution in its annual report, "the group born abroad of working age would have to be three times larger than that contemplated by the INE in its most recent population projections." It refers to the latest estimates from the statistics institute, according to which immigration will bring 10 million more inhabitants to Spain until 2053.
The Bank of Spain report analyzes the sustainability of pensions to reach other conclusions, such as that the Government's incentives to extend working life are not sufficient or that the possible increases in Social Security contributions from 2025, if implemented, will have detrimental effects on the labor market.
When referring to immigrants, the Bank of Spain highlights their participation rates in the labor market, higher than "natives", as well as their contribution not only to the maintenance of pensions, but also to reducing "the imbalances between supply and demand," explained the general director of Economy and Statistics of the institution, Ángel Gavilán, when presenting the report.
The net arrival of foreigners, equivalent to five million people between 2002 and 2022, has become "the only source of growth in the resident population in Spain." Meanwhile, Spain shows, at a statistical level, the lowest birth rates of the surrounding countries and one of the highest life expectancies.
The analysis of the Bank of Spain is aimed at finding formulas with which to resolve the insufficient income to finance pensions. Its report warns, for example, of the effects of raising Social Security contributions as part of the activation in 2025 of the safeguard clause to guarantee the sustainability of the system.
For every one percentage point increase in quotas, the labor market would lose 0.25% of its strength. Since Airef estimates that the increase should be 2.7 points, job destruction, according to the model proposed by the Bank of Spain, would be equivalent to 135,000 workers.
The report also doubts the effects of the Government's new incentive system to delay the retirement age. It has already been achieved that the workers who benefit from this formula have gone from 4.8% in 2021 to 8% in 2023.
If one hundred percent of those who are going to retire decided to do so one year late, at age 68, the average savings for the system would barely be four tenths. If it were two years late, it would be seven tenths, and if the delay were three years, it would be one point.
These are results much lower than those announced by the Government and, in the opinion of the Bank of Spain, insufficient to guarantee the sustainability of pensions. "Too many households would have to delay the retirement age for this to have an impact," says Gavilán.
