The so-called 'Economy of longevity', that derived from the increase in life expectancy, generated a direct, indirect and induced impact in our country of 325,303 million euros of added value in Spanish GDP in 2019, equivalent to 26% of GDP in that year. This is according to the study "Researching the economy of longevity in Spain" presented today at the headquarters of the Press Association of Madrid. An analysis, prepared by the leading international analysis firm Oxford Economics in collaboration with the University of Salamanca, which assesses the socio-economic impact and quantifies the economic value of the long-lived population in our country as a contribution to the growth and stability of the Spanish economy. This study also points out that spending by the over-50s in Spain contributes to the creation and maintenance of 4.4 million jobs in Spain.
This report offers a cross-sectional view of the economic impact of the activities carried out by the over-50s. The study takes a differentiated look at the socio-economic impact of the activities of the Spanish resident population and of tourists visiting our country.
The document analyses the contribution of this population group from three different perspectives: the impact on the economy of the population resident in Spain; the impact of tourists visiting our country and, finally, the role they play in job creation.
For Óscar González Benito, Director of the General Foundation of the University of Salamanca and head of CENIE, "the improvement in the quality of life and social welfare, as well as medical and scientific advances, are leading to a longer-living and healthier society. This demographic change is transforming the socio-economic panorama in Spain, offering great opportunities, but also new challenges". According to the UN, 41% of the population in Spain was over 50 years old in 2019. By 2050, this percentage is expected to reach 53%. Given this situation, "understanding the over-50 population as an attractive market segment, capable of sustaining and growing the Spanish economy thanks to its purchasing power, is key when facing this new demographic reality", concludes González Benito.
Contribution to the economy of the population over 50 years of age
Of the 325,303 million euros of added value to the Spanish GDP generated by economic activity related to the over 50s in our country, 170,505 million euros would correspond to the added value from the acquisition of goods and services from Spanish companies (direct impact), 94,756 million euros would correspond to the added value derived from the provision of goods and services to these companies (indirect impact) and 60,042 million euros from the added value of the salaries paid by companies and their supply chain (induced impact). This spending ends up impacting a wide range of sectors.
The study points out that, in 2019, the over-50s, around 18.6 million people, spent 334,942 million euros, equivalent to 60% of the total expenditure of the Spanish population. This figure represents a per capita expenditure of 17,960 euros. This figure contrasts with the average expenditure of 13,970 euros per person of Spanish residents aged between 25 and 49 (around 16.4 million), who spent a total of 229.7 billion euros. The highest expenditure is found in the 50 to 59 age group (140,004 million euros), followed by those aged 60 to 69 (98,462 million euros), 70 to 79 (64,417 million euros) and finally those over 80 (32,059 million euros). In addition, this economic activity contributed 118,110 million euros in taxes.
In terms of employment, one fifth of Spanish employment in 2019 was related to the activities of the over-50s. In fact, this age segment helps to maintain, with its spending and the activity generated around it, around 4.4 million jobs, of which nearly two million are direct jobs. Of these 4.4 million, 2 million are women and 2.4 million are men.
The breakdown of jobs generated in relation to the consumption of the over 50s in Spain supports a total of around 1.9 million direct jobs, mainly in the industrial and leisure sector; 1.6 million indirect jobs in manufacturing, commerce and financial services, mainly, and 942,500 induced jobs in the hotel and catering, social and health services and commerce, among others. Specifically, the impact generated around this group represents 91,047 million euros of added value for the real estate sector, followed by 45,545 million euros for the manufacturing and industrial sector, as well as 25,873 million euros for retail and wholesale trade, among others.
An in-depth analysis of the employment data shows that activities related to the employment of the over 50s contribute to supporting 246,100 jobs for people aged between 16 and 24, which is equivalent to a quarter of youth employment in Spain.
Economic contribution of tourists over 50
In 2019, 83.5 million people visited Spain; 30.3 million were over 50 years old. This tourism segment accounted for 36% of the total.
International tourism by the over-50s had a direct, indirect and induced impact of €35.66 billion on Spanish GDP in 2019, which according to the National Statistics Institute is equivalent to 12.4% of GDP. These visitors spent 33,125 million euros, equivalent to an expenditure per person of 1,100 euros. The main expenditures were on food and catering, accommodation, transport, cultural, sporting and entertainment services, among others. In addition, these activities generated a total of 16,043 million euros in taxes.
In terms of employment, tourism for the over 50s contributed to the creation and maintenance of 594,600 jobs in different sectors. Of these, 312,400 were directly generated jobs.
Longevity in workplaces
In 2019, seven million workers were over the age of 50 in Spain, representing 30% of the workforce in the Spanish market. A figure that, despite the logical dynamics of replacement installed in the Spanish labour market, contradicts those data that indicate that the older the worker, the lower the participation in the labour market as a result of the approaching retirement age.
In addition, the study finds that workers over 50 occupy proportionally more important positions. In fact, 5% of the 50-64 age group occupy high-level positions, compared to 4% of 25-49 year olds, while 13% of the over-65s occupy the same category of jobs.
People over 50 in senior positions also have higher salaries than younger people in similar positions, in line with their career paths. Those over 60 in managerial positions have an average salary of €96,100. In line with modern economic theory relating wages to productivity levels, this suggests that workers over 50 would be more productive than their younger counterparts in positions requiring skilled knowledge and experience.
In conclusion, this study provides a large body of data that demonstrates conclusively the significant socio-economic contribution to the Spanish economy of the economic activity generated by the over-50s. Not surprisingly, on the employment front, spending by the over-50s is behind the maintenance of 246,100 jobs allocated to young employees aged 16 to 24, while helping to sustain a total of 1.4 million jobs for the over-50s.
Digitalisation, finance and wealth of the over-50s
The study also includes three case studies that explain some of the determining circumstances of the 50+ age group in relation to their degree of digitalisation, the relevant role they play in terms of investment support, as well as the health of their finances.
As far as digitalisation is concerned, the study finds considerable room for improvement, especially with regard to the education of the elderly. However, data from the INE and Eurostat show that the use of the Internet is increasing among the over-50s, mainly to communicate, seek information, receive training and make purchases. In this regard, it is worth noting that 58% of the over-55s use digital banking to carry out their transactions on a recurring basis.
On the other hand, the role played in Spain by the population over 50 years of age as a driver of investment and financial support is considered key, in light of the data reflected in the report. According to the report, citizens between 55 and 74 years of age are above average in terms of holding shares, investment funds and other types of assets as a result of placing part of their savings in financial instruments. In addition, it should be stressed that almost 40% of the consolidated entrepreneurship projects in Spain between 2019 and 2020 were launched by people aged between 55 and 64, according to data from the GEM Spain Report.
Finally, the report highlights that the population over 50 years of age constitutes the age group with the highest financial health in Spain in terms of income, salaries and pensions, as well as in relation to their savings and property. In this sense, the over-56s receive around 138,000 million euros in pensions and 74,000 million euros in salaries, according to AEAT data. Moreover, 2.1% of the over-65s were still working in Spain, compared to 5.9% who are still active, on average, in EU countries, according to Eurostat data.
In terms of salaries, more than 192,000 employees over the age of 65 earned an average of 18,000 euros more than workers aged 18 to 35 in 2019, while almost 90% of Spaniards over the age of 65 owned their own home, compared with an overall population average of 75% in 2019, according to INE data.
About CENIE
CENIE (International Centre on Ageing) is promoted by the General Foundation of the University of Salamanca, together with the Fundación General Consejo Superior de Investigaciones Científicas, the Directorate General of Health of Portugal and the University of Algarve, and is supported by the INTERREG V-A Programme, Spain-Portugal, (POCTEP), 2014-2020, of the European Regional Development Fund (ERDF).
The purpose of CENIE is related to the incessant growth of life expectancy in the world, one of the most relevant achievements of our contemporaneity, as transforming as it is full of opportunities and new challenges. Scientific advances, health care, improvements in nutrition and hygiene, together with a growing interest of the population in their health, and the implementation of appropriate policies, justify the achievement of such a significant milestone.
We have managed to extend people's lives as never before in our long civilisational history. It is now essential that this happy extension be accompanied by everything that makes a more active, healthy, participatory and prosperous existence possible, so that this final stage becomes a true golden age. CENIE's work is taking place at a time when this genuine demographic revolution is beginning to become a proven and universal reality. This is the precise time in which to research, experiment, disseminate and reach a consensus on all the actions necessary to achieve the aforementioned goal. With the firm conviction of its necessity. And of its urgency.
A faithful exponent of what the present is, and of what the immediate future will bring, the CENIE is constituted as an open, dynamic project, in a continuous process of learning and improvement; within a global reality, where communication and the exchange of experiences on better longevity will always be the key to obtaining optimum results; in permanent dialogue with the world, fostering meetings between the most relevant institutions and people, leaders in CENIE's field of action; combining and promoting the generation of research on ageing and longevity and, at the same time, its implementation, together with a permanent evaluation process; forging the essential alliances between the scientific, academic, economic, educational, cultural, political, media and social spheres; identifying the extraordinary strengths and opportunities that population longevity offers; establishing continuous and direct communication with the society it addresses, thus collaborating in a realistic, unprejudiced, positive and integrating perception of what longevity means; and generating the reflection, analysis, design and implementation of as many strategies, proposals and measures as are necessary to achieve its stimulating purpose.
About Oxford Economics
Oxford Economics was founded in 1981 as a trading company with Oxford University Business School to provide economic forecasting and modelling to UK companies and financial institutions expanding overseas. Since then, it has grown into one of the world's leading independent consultancy firms, providing reports, forecasts and analytical tools relating to over 200 countries, 250 industry sectors and 7,000 cities and regions.
Headquartered in Oxford, England, with regional centres in New York, London, Frankfurt and Singapore, Oxford Economics has offices around the world: Belfast, Boston, Cape Town, Chicago Dubai, Dublin, Hong Kong, Los Angeles, Melbourne, Mexico City, Milan, Paris, Philadelphia, Stockholm, Sydney, Tokyo and Toronto. The company has 400 employees, including one of the largest teams of macroeconomists and specialists in different industry sectors.
About the Salamanca University
The University of Salamanca is the oldest university in Spain and the Hispanic world and the third oldest in Europe. It was also the first European educational institution to obtain the title of University, by the royal decree of Alfonso X the Wise, in 1252. Currently, it maintains an intense teaching and research activity in a wide range of academic disciplines and the Academic Ranking of World Universities (ARWU), better known as the Shanghai ranking, places the University of Salamanca, in its latest publication, among the 500 best Universities in the world.