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Spain The gap in GDP per capita relative to the upper half of OECD countries remains large, reflecting differences both in labour productivity and labour utilisation. Total factor productivity growth has been sluggish. Income inequality has increased since 2007 and remains above the OECD average, partly driven by high rates of unemployment and the fall in incomes of households at the bottom of the income distribution. Spain's emissions of greenhouse gases per capita are below the OECD average. Progress on Going for Growth 2017 priorities has been limited. Changes to corporate and labour taxes have made the tax system more growth-friendly, but there remains ample room to improve the progressivity of the tax system. Reforms of activation policies have continued throughout 2017-18, but implementation is lagging. While more should be done in this area, especially to help the long-term unemployed, recognising the reforms already taken this priority has been replaced with a new priority on innovation. This is justified by weak productivity growth and the substantial decline in innovation spending during the crisis. Boosting inclusive growth will hinge on a higher employment and productivity gains. Productivity growth can be raised via shifting the tax burden to less distortive taxes, bolstering competition, strengthening educational outcomes and boosting innovation performance. Increasing labour mobility and improving access to vocational education would lower labour market inequalities and boost skills. Growth performance, inequality and environment indicators: Spain Average annual growth rates (%) GDP per capita Labour utilisation of which: Labour force participation rate
A. Growth
Employment rate1 Employment coefficient2 Labour productivity of which: Capital deepening Total factor productivity Dependency ratio
2002-08 1.4 1.6 1.8 0.0 -0.2 0.0 0.6 -0.6 -0.3
2012-18 2.0 1.5 -0.3 2.0 -0.1 0.6 0.1 0.5 -0.1
GHG emissions per capita4 (tonnes of CO2 equivalent) GHG emissions per unit of GDP4 (kg of CO2 equivalent per USD) Share in global GHG emissions4 (%) * OECD simple average (weighted average for emissions data)
Gap to the upper half of OECD countries5
Per cent 0 -5 -10 -15
B. Inequality and environment
Gini coefficient3 Share of national disposable income held by the poorest 20%
C. The gap in GDP per capita remains large
Level
Annual variation (percentage points)
-20
2016 34.1 (31.7)*
2013-16 -0.1 (0)*
6.2 (7.6)*
0 (0)*
-25
2016 6.1 (10.9)* 0.2 (0.3)* 0.7
Average of levels 2010-16 6.4 (11.3)* 0.2 (0.3)* 0.7
-30 GDP per capita
GDP per hour worked
-35
Source: Panel A: OECD, Economic Outlook Database; Panel B: OECD, Income Distribution and National Accounts Databases; United Nations Framework Convention on Climate Change (UNFCCC) Database and International Energy Agency (IEA), Energy Database; Panel C: OECD, National Accounts and Productivity Databases. StatLink 2 https://doi.org/10.1787/888933955370
ECONOMIC POLICY REFORMS 2019: GOING FOR GROWTH Š OECD 2019