Pension expenditure in Spain: a European comparison

Rationale. There is significant disparity in the pension expenditure-to-GDP ratio across European countries. This article examines the size of the Spanish pension system relative to those of other EU countries and analyses the drivers behind the differences observed. Takeaways. • In 2019, pension expenditure in Spain, relative to the size of its economy, was above the EU’s simpleaverage and similar to the GDP-weighted average. • In comparison with the EU in 2019, the ageing process was less advanced in Spain and pensionscheme coverage was lower. In contrast, Spain had a lower employment rate and a higher level ofbenefits relative to the average wage. • Demographic projections suggest that pension expenditure in Spain will increase significantly. Slightlymore than 40% of this increase could be offset if Spain’s employment rate were to rise to equal that ofGermany.