Spain's 37.5-Hour Workweek Winners
Spain's historic workweek reduction will mobilize 12 million workers, with women and older employees gaining most.
The December 2024 agreement marks Spain's first major working time reform in 40 years, potentially creating a budget surplus of 4.63% while reducing income inequality. Working 37.5 hours per week: Who Truly Gains from Spain's new Workweek reform? by Edlira Narazani using EUROLAB microsimulation reveals surprising winners: not young progressives, but older workers nearing retirement and low-income women seeking workforce entry.
How it creates a budget surplus:
Higher labor participation generates 1.29% increase in tax and social security revenues
Reduced reliance on income support cuts means-tested benefit spending by 0.19%
Net fiscal improvement: 4.63% budget surplus from mobilizing underutilized workers
No productivity losses assumed in the model
By the numbers:
Total hours worked increase 0.88% despite shorter standard week
Women's working hours rise 1.7% vs men's 0.55%
Workers aged 55-67 boost participation 3.25% (women) and 1.94% (men)
Gini index drops 1.01%, indicating reduced inequality
In-work poverty falls 1.78%, poverty gap narrows 2.4%
9 million of 12 million affected workers are women
The big picture: Spain became the world's first country to adopt universal eight-hour workdays in 1919, following a 44-day Barcelona general strike. Prime Minister Felipe González reduced hours from 44 to 40 in the 1980s. Now, after negotiations between the left-wing government and major unions (but opposed by employers' associations), the country will implement 37.5-hour weeks by December 31, 2025. Deputy PM Yolanda Díaz called it a "21st-century measure" settling "a debt with the working people of Spain."
Reform mechanics:
Workers between 37.5-40 hours drop to 37.5
Those under 37.5 hours get wage boost (factor of 40/37.5) to maintain income
Workers over 40 hours keep current arrangements unchanged
Annual average calculation allows flexibility
EUR 10,000 fines per worker for violations
Key behavioral responses:
Low-income women (bottom quintile) increase hours 3.44%, participation 3.23%
Part-time work jumps 5% among men, especially fathers (6.4%)
Full-time work rises 2% among women, particularly partnered non-mothers (3%)
Young women (18-32) boost hours 1.87%, potentially reducing NEETs
Middle-aged workers (33-54) show smallest gains due to high baseline participation
Other Things To Note:
Spain's employment hit record highs in 2023, but average hours remain below pre-COVID levels
Structural shift toward services and part-time work accelerated by pandemic
Youth unemployment remains among EU's highest despite recovery
Similar reforms showed mixed results: France's 35-hour week initially boosted jobs but faced long-term challenges
Four-day workweek trials across EU show productivity gains but Spain's reform maintains five days
Study limitations: The EUROLAB model doesn't account for fixed costs like childcare and commuting, potential employer responses to wage constraints, productivity changes, or increased consumer spending from additional leisure time.
Between the lines: While marketed as progressive reform responding to post-COVID work preferences, the policy addresses Spain's structural labor challenges. Young Spanish men increasingly vote for right-wing parties despite economic pessimism, suggesting the reform's political framing may not match its actual beneficiaries. It may be the fact that youth unemployment is still high and demand for young male labor is relatively low, which also explains who benefits from the reforms. The reform's actual winners (older workers and low-income women) align perfectly with Spain's labor market gaps, while the youth it was marketed toward face different structural challenges that reduced hours alone won't solve.
Bottomline: Spain's workweek reduction functions as sophisticated labor activation policy disguised as progressive reform. By compensating short-hours workers while capping full-timers at 37.5, it draws inactive workers into the market without disrupting high earners, creating a self-financing mechanism through increased tax revenues and reduced benefit dependency.